SOFR

Issuers and investors favor term SOFR for ABS floaters but regulators worry that expanding its use—even just a little—will undermine the new floating-rate benchmark.

The car maker is refinancing three revolving credit facilities using the Secured Overnight Financing Rate, and embedding climate-change goals into the deals.

Federal Reserve Vice Chair Randal Quarles has made it clear that banks failing to make the transition away from the benchmark rate could face supervisory consequences.

The modifiable templates are a follow-up to a similar notification the organization created in 2019 for lender use.

Starting Thursday, firms should stop issuing new loans, bonds and securitizations tied to the discredited benchmark, according to the Bank of England.

The heads of the Federal Reserve and Treasury are urging passage of legislation that would replace Libor with the Secured Overnight Financing Rate in certain contracts. That would spare banks litigation over trillions of dollars of contracts when Libor expires in 2023.

The act, yet to be signed by Gov. Cuomo, aims to resolve the difficult problem of how to fairly compensate floating-rate investors in instruments for which the London interbank offered rate is no longer published.

A PIMCO-sponsored HELOC securitzation, as well as a mortgage-insurance linked transaction, are the latest examples of issuers getting a head start on switching to an expected replacement benchmark for Libor.

Lenders also increased jumbo product availability as well as rolling out new SOFR-indexed ARMs.

The statement comes after multiple small and midsize institutions earlier this year warned the agencies that the secured overnight financing rate was ill-suited to them.