BANK & SHORT-TERM DEBT MARKET


COMMERCIAL PAPER

Commercial Paper Outstanding:  Note the pre-crisis surge in Asset-backed Commercial Paper. This short-term funding was utilized in a variety of structured investment vehicles that invested in longer-dated assets such as residential mortgage loans and residential MBS.

Commercial Paper Outstanding: Note the pre-crisis surge in Asset-backed Commercial Paper. This short-term funding was utilized in a variety of structured investment vehicles that invested in longer-dated assets such as residential mortgage loans and residential MBS.

Commercial Paper Rate

Commercial Paper Rate

 

BANK LOANS (C&i)

Commercial & Industrial Loans:  C&I lending picked up late in Q4 2018. However, growth has slowed in during 2019 with YoY growth now at 6.1%, down from the recent +10% levels. QoQ growth rate was 0.8%, or annualized rate of 3.2%.

Commercial & Industrial Loans: C&I lending picked up late in Q4 2018. However, growth has slowed in during 2019 with YoY growth now at 6.1%, down from the recent +10% levels. QoQ growth rate was 0.8%, or annualized rate of 3.2%.

Prime Rate and LIBOR

Prime Rate and LIBOR

 

ALTERNATIVE REFERENCE RATE TRANSITION: SECURED OVERNIGHT FINANCING RATE (SOFR)

Secured Overnight Financing Rate (SOFR) and LIBOR

Secured Overnight Financing Rate (SOFR) and LIBOR

Secured Overnight Financing Rate (SOFR) and Prime Rate

Secured Overnight Financing Rate (SOFR) and Prime Rate

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:

Alternative Reference Rate Committee (ARRC)

New York Federal Reserve - SOFR data

FDIC Article on SOFR / LIBOR Transition

SOFR FAQ (Reuters)

SOFR Primer (SIFMA)

S.E.C. Comments on LIBOR Transition (S.E.C.)