For US federal tax purposes, the main consideration for replacing an interbank offered rate (IBOR) with a fallback rate, or of adding a fallback mechanic to an existing instrument, is that this alteration could result in a deemed exchange of the instrument (with tax consequences for both the issuer of the instrument and the holder of the instrument). Guidance for addressing the US federal tax consequences of an IBOR with a successor rate resides in three areas:
- Older rules for addressing the US tax consequences for amendments to debt in general;
- Treasury Regulations initially proposed in 2019; and
- An IRS Revenue Procedure released in 2020.
Please join Mayer Brown partner Thomas Humphreys and associate Brennan Young as they provide an overview of IBOR replacement under current federal tax guidance and a discussion of practical considerations in connection with various different types of instruments.
For more information, and to register, please visit the event website.