The Federal Reserve Bank of New York will begin publishing the Secured Overnight Financing Rate, or SOFR, on April 3, the bank announced today. SOFR is a broad measure of overnight Treasury financing transactions recommended by the Alternative Reference Rate Committee last year as an alternative to U.S. dollar Libor in certain new derivative and other financial contracts. The New York Fed will also publish other rates reflecting repo transactions, including the Broad General Collateral Rate and the Tri-Party General Collateral Rate. The rates will be published each day at 8 a.m.
With the viability of Libor past 2021 being questionable, a recent article in the ABA Banking Journal outlines the transition issues facing the industry, including the transition from an unsecured rate to a secured rate, and the transition from a rate published with several different tenors to a solely overnight rate. For more information, contact ABA’s Barry Mills.