Cisco IOS Hints and Trickshas a nice post concerning one of the possible ”gotchas” of using the neighbor local-as command (without the no-prepend option):
Local-AS has to be matched by incoming filter-list
In a previous post I’ve described how you can use neighbor local-as feature to fix AS-number mismatch between adjacent autonomous systems. However, without additional options, the local-as is inserted in the AS-path of incoming BGP updates before any inbound filters. Your inbound filters thus have to match the local-as as well.
Cisco Command Reference:
To customize the AS_PATH attribute for routes received from an external Border Gateway Protocol (eBGP) neighbor, use the neighbor local-as command in address family or router configuration mode. To disable AS_PATH attribute customization, use the no form of this command.
neighbor ip-address local-as as-number [no-prepend [replace-as [dual-as]]]
no neighbor ip-address local-as as-number