SOFR Loans
Anyone starting to make loans, or borrow in SOFR yet? It feels like everyone keeps kicking the can down the road, but eventually bank warehouse line requirements may force the issue.
Anyone starting to make loans, or borrow in SOFR yet? It feels like everyone keeps kicking the can down the road, but eventually bank warehouse line requirements may force the issue.
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The bank guys I'm talking to are going to try and roll out SOFR quotes towards the middle of the summer. I've gotten LIBOR quote from the agencies as recently as last week.
I've seen a few references in Commercial Mortgage Alert of deals beginning to price on SOFR.
You're going to see all the debt funds exclusively pricing to LIBOR until the CLO markets are capable of handling SOFR based loans. You saw this change a few months back with some funds abruptly changing from quoting based on SOFR.
Although the loans aren’t priced over SOFR, most lenders are putting Libor replacement language into their loans which discusses what happens if and when Libor goes away. Looking at it from this perspective, if the replacement language calls for using SOFR, technically the loan does have a price over SOFR.
That's what our agreements are doing, pretty much just including language to switch over to the preferred rate plus some spread to match a synthetic LIBOR.
Was it anyone else job to fill out a million ISDA IBOR Fallback Protocals on that website?
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