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U.S. Leveraged Loans Are Seen Ditching Libor Within Weeks

  • Market had been waiting for forward-looking SOFR to make shift
  • Revolvers, CLOs also seen transitioning to new reference rate
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Photographer: Chuanchai Pundej/EyeEm/Getty Images
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The U.S. leveraged loan market could soon pivot away from the London interbank offered rate for new deals after officials endorsed a series of forward-looking benchmarks tied to its main U.S. replacement.

The Federal Reserve-backed Alternative Reference Rates Committee’s ratification of a term structure for the Secured Overnight Financing Rate should allow bankers and borrowers to begin using the benchmarks as soon as September, according to Meredith Coffey, executive vice president of research & public policy at the Loan Syndications and Trading Association.