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US Markets Building Liquidity in the SOFR Market

On Friday, the CME announced they will start publishing Term SOFR Rates for 1-month, 3-month and 6-month tenors.

This establishes a SOFR reference rate that will be used to set interest rates in advance that pay in arrears, similar to current LIBOR term rates. This introduces an alternative to the current SOFR standard where the rate of interest paid is both set (looking back at daily fixings) and paid in arrears.

Navigating the transition to SOFR requires understanding the economic and the accounting considerations to ensure that both debt and derivatives are aligned.

Contact us to better understand and manage your LIBOR transition.

Written by alexandra-loppnow

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