Topic: Reference Rates
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We just received a letter from the Intercontinental Exchange (ICE) stating that it became the administrator for the London Interbank Offered Rate (LIBOR) in February of 2014 and demanding that we either sign a license agreement and pay a related licensing fee for using the LIBOR or sign a “non-usage declaration.” Are we required to pay licensing fees to the ICE? Our bank has over $1.5 billion but less than $10 billion in assets.
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The answer depends on your bank’s usage of the LIBOR. If your bank uses the LIBOR as a benchmark rate in any of its loan notes or agreements, or in other ways listed in the letter, you will have to pay a licensing fee. But if your bank has eliminated any use of the LIBOR…