While cessation date for USD LIBOR is June 30, 2023, deadlines for continuing IBOR benchmarks for other currencies are more mixed. What is current state of alternative currency benchmark rates? What information do you need to assess their use in your facility documentation?
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SOFR is a virtually risk-free rate and has an enormous underlying transaction value, a widely diverse range of direct and indirect market participants and is administered by the NY Federal Reserve Bank and is is subject to review by the New York Fed Oversight Committee.
(Bloomberg) A clear leader is emerging in the migration away from Libor for the vast global derivatives industry.Trading activity pegged to the U.K.’s Libor replacement stood at 46% in February with the remainder linked to the discredited benchmark, according to the latest data from the International Swaps and Derivatives Association. That compares with just 3.5% pegged to new reference rates for the Japanese yen, and about 5% for those on the U.S. dollar markets that are worth more than $200 trillion collectively.The Sterling Overnight Index Average, or Sonia, benefits from its more established status, the comparatively small size of the U.K.’s financial market, and the fact that domestic regulators that have led the global transition.“Sonia is blazing the trail for everyone else,” said Jason Granet, chief Libor transition officer at Goldman Sachs Group Inc. “The Sonia market helped establish a lot of infrastructure and calculation methodologies,