JP Morgan first to issue SOFR-linked preferred stock

BofA, Goldman Sachs and others are also preparing for Libor’s end

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JP Morgan’s latest preferred stock issuance has a first-of-its-kind provision buried in the small print: the floating leg will pay a forward-looking term rate based on SOFR, the secured overnight financing rate.

The $2.25 billion offering, which settled on July 31, will pay a fixed rate of 5% until August 1, 2024 and then switch to a floating rate of three-month term SOFR, plus a spread of 3.38%.

Such a rate does not currently exist. The Alternative Reference Rate Committee (ARRC) convened by

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