BANK & SHORT-TERM DEBT MARKET
BANK LOANS (C&i)
ALTERNATIVE REFERENCE RATE TRANSITION: SECURED OVERNIGHT FINANCING RATE (SOFR)
The Secured Overnight Financing Rate (SOFR) is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities. SOFR is intended to replace the US dollar London Interbank Rate (US LIBOR) in future financial contracts. SOFR was selected in 2017 by the Alternative Reference Rates Committee (ARRC) chaired by the New York Federal Reserve. It is expected that a LIBOR substitute needs to be in place for banks to use by the end of 2021.
For more information on the SOFR transition from LIBOR, you may find these links informative:
SOFR FAQ (Reuters)