After more than 30 years, the London Interbank Offered Rate (LIBOR), the reference rate for hundreds of trillions of dollars across a broad array of global financial products, will sunset for new deals, as of year-end 2021. 

LIBOR has long been the industry's go-to benchmark for short-term lending. While financial institutions have been preparing for LIBOR's cessation since the introduction of LIBOR's US alternative, the Secured Overnight Financing Rate (SOFR), in 2018, non-financial companies have been trailing in progress significantly. Whether it's planning for the transition of existing contracts referencing LIBOR or choosing a new alternative that suits their needs for financial deals going forward, non-financial companies should have a plan in place to ensure the transition minimizes internal financial and operational impacts and to avoid widespread disruption to financial markets, products, and participants.

But do they have a plan? 

In our recent LIBOR transition corporate survey, 45 percent of respondents told us they had not started any transition projects or initiatives. Additionally, a KPMG review of 2019 year-end 10k filings by non-financial firms in the S&P 500 revealed that only 16 percent of these firms cited the cessation of LIBOR as an industry risk.