November 13, 2019 - According to CME, there have been over $300 billion of SOFR floating rate issuances through October 2019. While material, that’s kind of old news. The new news? That SOFR bilateral loans are beginning to appear publicly. According to a JP Morgan press release in early October, JPM inked a bilateral SOFR loan with Brazilian bank Itau BBA. We have heard rumors of these vanguard deals, but they have been hard to publicly spot. Nonetheless, as will be discussed in the LSTA’s “End of LIBOR” webcast on Thursday, we (along with lenders, vendors and consultants) have been working hard to make SOFR loans doable. In particular, we are a driver in the process to make SOFR “operationalizable” and have released a SOFR in Arrears Draft Concept Credit Agreement.
The LSTA is a member of the Alternative Reference Rates Committee (ARRC), co-chairs the ARRC Business Loans Working Group (BLWG) and the BLWG Operations Subgroup. For more information on LIBOR cessation and the implementation of SOFR, please see the LSTA LIBOR Magazine or contact LSTA LIBOR experts mcoffey@lsta.org (for policy, markets and general information), tvirmani@lsta.org (for legal issues) and ehefferan@lsta.org (for operations issues).
