Bloomberg joins race for SOFR credit add-on

Benchmark provider building bolt-on adjustment from short-term bank lending data

The race to build a credit adjustment for the secured overnight financing rate – the Federal Reserve’s preferred US dollar Libor replacement – is stepping up a gear, with a new entrant throwing its hat in the ring after US agencies decided not to endorse a Libor alternative specifically aimed at dollar lending markets.  

Bloomberg is readying a dynamic credit spread benchmark, which would reflect the marginal cost of bank funding and could be layered on top of SOFR for dollar lending.

“Given