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So Far... and Is SOFR So Good?

Posted by Jacqueline Cook on Jul 30, 2021 3:27:00 PM

By Jacqueline Cook, Senior Knowledge Development Lawyer

Following much anticipation, the Alternative Reference Rate Committee (ARRC) has announced its official recommendation of the CME Group’s forward-looking Secured Overnight Financing Rate (SOFR) term rates (SOFR Term Rates). Market participants should now have "all the tools"[1] needed to transition to US dollar (USD) SOFR.

Earlier this week, ARRC issued two press releases:

  • publishing (a) conventions for SOFR Term Rates and (b) best practice recommendations for the use of SOFR Term Rates, and announcing the SOFR First Convention switch for USD linear swap trading;[2] and
  • recommending CME Group SOFR Term Rates and publishing a factsheet on key steps and milestones for the LIBOR transition.[3]

ARRC’s announcement has been welcomed as "an important milestone for the industry and the continued development of the broader SOFR ecosystem."[4]

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Topics: SOFR, LIBOR, Alternative Reference Rate Committee, SOFR Term Rates

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Talking Trade Finance is here to provide you with all of the latest updates in the Trade & Export Finance Industry.

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Meet the Editor

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Sam Fowler-Holmes is a partner in the Trade & Export Finance Group in Sullivan’s London office. He specialises in structured and unstructured trade, commodity and export finance, advising both financial institution and corporate clients on a range of financing products including pre-export financing, prepayment financing, letter of credit and payment instrument facilities and working capital and borrowing base financings. Sam is a regular speaker at the Sullivan trade and export finance seminars and is a member of the ITFA Emerging Leaders Committee.

 

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