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Walker & Dunlop Getting First Leveraged Loan Tied to SOFR

  • Real estate lender is using Libor heir for $600 million deal
  • Entire market has to stop using Libor for new deals in 2022
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Real estate lender Walker & Dunlop Inc. became the first company to announce a U.S. leveraged loan sale that fully embraces regulators’ preferred replacement for the London interbank offered rate, a milestone in the shift away from Libor that could finally unleash a flood of copycats.

The $600 million seven-year loan will be benchmarked to the Secured Overnight Financing Rate, according to a person familiar with the matter. Libor is being phased out because of the rigging scandal that came to light a decade ago, and SOFR is a leading candidate to fill its role.