The U.S. Internal Revenue Service and the Department of Treasury have issued final regulations, available here, to provide guidance concerning tax consequences of the transition away from using discontinued tenors of LIBOR or other interbank offered rates in contracts, such as loans, bonds, asset backed securities and derivatives. The Final Regulations follow the proposed regulations issued on October 9, 2019 and Revenue Procedure 2020-44 published on October 9, 2020. The Final Regulations specify when a modification of a contract or instrument that uses a discontinued IBOR rate will not be considered to constitute a significant modification under U.S. federal income tax law. As described in more detail below, such modifications are referred to as "covered modifications" and other modifications are referred to as "noncovered modifications." The Final Regulations will become effective on March 7, 2022 and, subject to certain conditions, may be relied upon by taxpayers in connection with any instruments or contracts modified before the effective date.

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