When Should You Start a Hedge Program?
A popular Chinese proverb says “the best time to plant a tree was 20 years ago. The second-best time is now.” This is equally true in the world of hedging.
A popular Chinese proverb says “the best time to plant a tree was 20 years ago. The second-best time is now.” This is equally true in the world of hedging.
With the transition from LIBOR in full swing, the time to act is now. New transactions starting in January 2022 will not be based on LIBOR. Some financial institutions are using SOFR, but there are other reference rates being used, causing market confusion and changing risk profiles.
On Friday, the CME announced they will start publishing Term SOFR Rates for 1-month, 3-month and 6-month tenors.
Friday, March 5, 2021, the official groundwork was laid to discontinue LIBOR by the FCA, IBA and ISDA.
In unexpected news today, the end of USD LIBOR has been extended to June 30, 2023.