SOFR

While the London interbank offered rate won't go dark until 2021, the commercial real estate finance industry should start preparing for the transition now, says the Mortgage Bankers Association.

An effort to increase awareness of the transition to a new benchmark rate, and nudge banks to start preparing, is expected to intensify in 2019.

They differ slightly from those released earlier by the Fed-convened ARRC, including language making it easier to ditch a SOFR-derived benchmark in favor of a new benchmark that has yet to be developed.

The Urban Institute's conclusion is based on estimates that one-year SOFR rates could be 25 to 50 basis points lower than the current Libor equivalent.

Fannie Mae has priced more securities that support a transition away from the London interbank offered rate.

Nearly 72% of attendees said their institutions were either only going to get involved “at the appropriate time” or “let the market figure out” how to move to a new benchmark.

Fannie Mae has issued securities supporting the transition away from the London interbank offered rate; something that could become more pressing for lenders if adjustable-rate mortgages were to become more prevalent.

Richard Sandor has been called the father of futures trading and carbon trading. His latest passion is a fledgling reference rate that is being used by a collection of small U.S. banks to price wholesale interbank financing.

The London interbank offered rate will likely be replaced by a new reference rate that critics say is better suited for the derivatives market than it is for commercial lending.

After a long and ultimately successful battle to exempt managers from risk retention rules, it may be hard to engage participants in the search for a suitable replacement for Libor.

The London interbank offered rate has its faults, but at least it compensates for counterparty risk; not so the benchmark being touted as a replacement.

The ICE Benchmark Administration is changing how banks submit interbank interest-rate quotes used to derive daily Libor rates.