Regional banks lead charge into term SOFR

Forward rate is favoured by smaller lenders and is increasingly used in caps and floors

Regional-banks-opt-for-SOFR
Thomas Hawk/Risk.net montage

When US regulators gave a forward-looking term version of the secured overnight financing rate (SOFR) a cautious go-ahead last July, it was on the proviso that its use in derivatives should be limited to end-user hedging of loans and cash instruments referencing the rate. That has not stopped term SOFR swaps becoming the hedging instrument of choice for some regional banks, while others in the market are also using the rate in more complex products, such as interest rate caps and floors.

Region

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Register

Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here