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On March 25, 2021, we
published a brief article on the transition from the London Inter-Bank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (SOFR). This article contained a background on the LIBOR to SOFR transition, and a summary of the transition language recommended by the Alternative Reference Rates Committee (ARRC). It also summarized and discussed the implications of the announcements that were made on March 5, 2021 (the March 5th Announcements) by the ICE Benchmark Administration (IBA) and the Financial Conduct Authority (FCA). These announcements collectively confirmed the dates of the “trigger events” set out in the ARRC recommended transition language, being December 31, 2021 for the one-week and two-month US dollar LIBOR settings, and June 30, 2023 for the overnight and the one-month, three-month, six-month and twelve-month US dollar LIBOR settings.
Yes Bank executes its first trade borrowing transaction linked to SOFR
April 09, 2021
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SOFR is an identified replacement for USD LIBOR (London Inter-Bank Offered Rate), which is likely to be phased out at the end of 2021.
Private sector lender Yes Bank has executed its first Secured Overnight Financing Rate (SOFR) linked transaction.
SOFR is an identified replacement for USD LIBOR (London Inter-Bank Offered Rate), which is likely to be phased out at the end of 2021.
“The transaction was a trade borrowing availed from Wells Fargo Bank and will provide further impetus to the bank’s export finance business,” Yes Bank said in a statement, adding that it is part of its benchmark transition management plan and is the first step towards a smooth transition to the new Alternative Reference Rates (ARR).
By Aaron Nicodemus2021-04-09T16:00:00+01:00
A new law in New York provides contracts that reference the London Interbank Offered Rate (LIBOR) with a fallback provision and safe harbor once the benchmark interest rate permanently ceases to be published at the end of the year.
S297B, signed into law by Gov. Andrew Cuomo on Tuesday, allows for any contract governed by the state of New York to replace LIBOR with a “recommended benchmark replacement.”
The law says the recommended benchmark replacement shall be based on the Secured Overnight Financing Rate (SOFR) and have been recommended by the Federal Reserve Board; the Federal Reserve Bank of New York; or the Alternative Reference Rates Committee (ARRC) for the applicable type of contract, security, or instrument.
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