Investors cheer debut Fannie SOFR note launch

Healthy demand could have been higher if S&P had approved benchmark

Buy-side firms have welcomed the first floating rate note (FRN) benchmarked to the Secured Overnight Financing Rate (SOFR), issued by Fannie Mae on July 26, with demand exceeding supply for the product.

The $6 billion issuance, which was underwritten by Barclays, Nomura and TD Securities, is viewed as another crucial step to encouraging broader adoption of the fledgling rate, which was launched in April as a replacement for US dollar Libor.

“The issuance by Fannie Mae represents an important