JPMorgan’s Seal of Approval Gives Huge Boost to Libor’s Replacement
- Leveraged loan market sees first new deal tied to replacement
- Watershed moment in switch from Libor after loan market lagged
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As finance milestones go, what happened Tuesday in the U.S. leveraged-loan market isn’t going to catch fire in the public consciousness. This is not the Dow Jones Industrial Average hitting some five-digit number for the first time.
But the announcement of a new loan offering tied to the Secured Overnight Financing Rate, or SOFR, is a huge moment for Wall Street. It raises hopes that the leveraged-loan market is finally making a real attempt to ditch Libor, like other parts of the financial markets -- such as derivatives and investment-grade bonds -- where far more progress has been made over the past few months, or even years.