LIBOR-SOFR Transition

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As described more fully below, effective on the first London banking day after June 30, 2023, the LIBOR benchmark that is currently used to calculate the interest rate on those asset-backed securities with a floating rate of interest that are identified on [the spreadsheet linked below][1] (the “Floating Rate Notes”) will be replaced with a SOFR benchmark plus a tenor spread adjustment, each of which is identified on [the spreadsheet linked below].  The tenor spread adjustment is in addition to the existing spread on each such class or series of asset-backed securities, which will also continue to apply.

Also as described more fully below, effective on the first London banking day after June 30, 2023, references to the LIBOR benchmark as a component (whether as a maximum rate or otherwise) of the calculation of the interest rate on those asset-backed auction rate securities (“ARS”) that are identified on [the spreadsheet linked below] (the “ARS”) will be replaced with a SOFR benchmark plus a tenor spread adjustment identified on [the spreadsheet linked below]. 

[The spreadsheet linked below] also identifies other asset-backed securities that are not impacted by the replacement of LIBOR (fixed-rate securities or floating rate securities that do not currently have LIBOR as a benchmark).

On March 5, 2021, the United Kingdom’s Financial Conduct Authority announced that LIBOR will cease to be provided or will no longer be representative after June 30, 2023, with respect to various tenors of LIBOR.  Reference is made to (a) the Adjustable Interest Rate (LIBOR) Act (the “Federal LIBOR Act”) signed into law on March 15, 2022, and (b) the Regulation Implementing the Adjustable Interest Rate (LIBOR) Act adopted by the Board of Governors of the Federal Reserve System (the “Board”), effective February 27, 2023 (12 CFR Part 253, Regulation ZZ) (the “Regulation”). 

Pursuant to the foregoing, on and after the LIBOR replacement date as defined in Section 253.2 of the Regulation (generally the first London banking day after June 30, 2023) (the “LIBOR Replacement Date”), the applicable Board-selected benchmark replacement which is based on the Secured Overnight Financing Rate published by the Federal Reserve Bank of New York or any successor administrator (“SOFR”) plus a tenor spread adjustment (the “Board-Selected Benchmark Replacement”) shall, by operation of law, be the benchmark replacement for the LIBOR contracts identified in Section 253.3(a) of the Regulation (except to the extent that an exception in paragraph (b) of Section 253.3(a) applies).  The tenor spread adjustments identified in the LIBOR Act and by the Board are set forth in Section 253.4(c) in the Regulation.  The Federal LIBOR Act also creates a safe harbor protecting from liability any person for the selection, use or implementation of the Board-Selected Benchmark Replacement.

As a result of the foregoing, either by operation of law pursuant to the Federal LIBOR Act and the Regulation or by action of the “determining party” (as defined in the Federal LIBOR Act and the Regulation), effective on the first London banking day after June 30, 2023, (a) the benchmark on each class or series of the Floating Rate Notes will change to the SOFR benchmark identified on [the spreadsheet linked below] with respect to such class or series; and the references to the LIBOR benchmark with respect to the ARS of each class or series will change to the SOFR benchmark identified on [the spreadsheet linked below] with respect to such class or series, which rate or rates constitute the Board-Selected Benchmark Replacement for LIBOR.  In addition, certain technical, administrative, or operational changes or modifications (defined in the Federal LIBOR Act and the Regulations as “Benchmark Replacement Confirming Changes”) will be implemented and become an integral part of such Floating Rate Notes, ARS and the applicable Indenture under which they were issued.

For the spreadsheet referenced above please click this link   (Updated 06/08/2023)

 

Please direct any questions regarding this notice to:

National Education Loan Network, Inc., as Administrator

Attention: Matthew Brinkman

Telephone: (402) 458-2243

Email: Matthew.Brinkman@nelnet.net