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Prime Bank conducts first SOFR-linked transaction

  • Staff Correspondent
  • 20 September, 2021 12:00 AM
  • Print news

Prime Bank has successfully completed its first transaction in Secured Overnight Financing Rate (SOFR).

This is a pioneering step for Prime Bank to adopt SOFR as the new global alternative benchmark rate, as London Interbank Offered Rate (LIBOR) will cease to exist after June 2023, said a press release. 

LIBOR has been the most reliable benchmark in the world for setting interest rates on the international interbank market for short-term loans.

However, SOFR provides a more accurate reflection of lenders’ USD funding costs and supports a large volume of transactions and financial products.

Transitioning away from LIBOR linked borrowing, Prime Bank made a trial SOFR-linked transaction on 25th August 2021 with Wells Fargo Bank, New York.