The end of LIBOR

Is anyone quoting the Secured Overnight Financing Rate (SOFR) + a spread for real estate loans yet? I have not gotten any traction with sponsors using prime as a benchmark and I'm curious what the RE world will use when LIBOR goes away. SOFR seems like a logical option but I haven't seen any loan requests using that rate yet.

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Comments (15)

Aug 15, 2018 - 11:14pm
WSO Monkey Bot, what's your opinion? Comment below:

Hey capitaltide, the following topics might be helpful:

  • Forward Libor Rates I am in the middle of building an lbo model and was hoping someone could suggest a free site where ... I might be able to get forward LIBOR rates for my debt schedule. If such a site does not exist, would ... LIBOR ...
  • How did LIBOR scandal affect billions of people? I'm thinking more in the millions. a) LIBOR is not the only benchmark b) plenty of student ... the Fed, not LIBOR. libor scandal ... loans, mortgages, etc are fixed rate or not based on LIBOR c) most people's pension/retirement money ...
  • Calculating/Finding LIBOR Forward Curve reflection of what my interest rate payments will look like when debt is a certain spread over LIBOR. Is ... Would like to incorporate the forward curve into my models to get a better (or more conservative) ... there either A) a website that can make the calculations B) an Excel tool I can integrate? Would love to ...
  • LIBOR VERSUS PRIME RATE the Prime? In every forum, it seems that all these firms are using LIBOR as their index + a spread. ... Hello Everyone, I am curious if anybody has experience in terms of financing properties. When ... taking out a loan for RE, is it an industry standard to always try and obtain a LIBOR rate rather than ...
  • Do you think my boyfriend was involved in BarCap Libor scandal? Does this seem suspicious? because I was there when he met up with one of the investigators for being a witness for a colleague who ... working. Now I'm starting to wonder the possibilities that he was involved in the LIBOR thing? ... currency exchange. What are the chances of someone in his position being involved in the case? ...
  • Recent move in 3M LIBOR Does anyone have any insight into what is driving 3-Month LIBOR lower as of late? Ever since the ... new year it's been trending lower. Thanks. LIBOR ...
  • LIBOR EUR vs LIBOR USD vs EURIBOR Also why should someone use EURIBOR instead of LIBOR EUR rates? active trading ... Maybe this is the wrong board, if so could someone advice me which other forums to use? Posting ... this question on quantnet seems also odd. Anyway: Why is there spread between LIBOR EUR and LIBOR USD? ...
  • More suggestions...

If we're lucky, maybe I can guilt some users to help you out: @Kurtis Blow" cshen359 @Akintayo- Alo. ACA"

You're welcome.

Aug 20, 2018 - 12:25pm
Blank999, what's your opinion? Comment below:

I've read internal counsel opinions on it, but everything I see is still labor based.

We have a while before it ends.

Aug 20, 2018 - 3:59pm
Mandarin25, what's your opinion? Comment below:

I've had borrower's request to have SOFR verbiage included in term sheets versus LIBOR replacement language. However, we did not oblige the request.

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Aug 21, 2018 - 10:27am
PacNumber, what's your opinion? Comment below:

Several indices have come to an end. This doesn't mean that the loan needs a new index. COFI was a major index for residential and commercial for decades. It went away in the early 2000's if I had to guess. The index is still tracked, but no new loans are tied to it.

There is someone somewhere with a loan on his house or building from the 90's still tied to COFI and it's doing just fine.

Aug 27, 2018 - 10:22am
Pierogi Equities, what's your opinion? Comment below:

Still have yet to see SOFR referred to in our models and no intentions anytime soon.

Quant (ˈkwänt) n: An expert, someone who knows more and more about less and less until they know everything about nothing.

Aug 27, 2018 - 11:29am
heister, what's your opinion? Comment below:

Given that LIBOR doesn't actually end until until at least 2021 given that the Bank of England has set 2021 as a transition deadline internally. I for one think many of these deadline dates are wildly optimistic, given that there are $350 TRILLION in debt and derivitaves currently on the market that are based on LIBOR and will require transition to a new standard. I think LIBOR is going to be around longer than "experts" are thinking.

https://www.treliant.com/News-and-Events/Articles-and-Insights/Article-Details/ArticleID/27465/LIBOR-Is-Going-Away%E2%80%94How-Do-We-Transition-350-Trillion-of-Debt-and-Derivatives-Graham-A-D-Broyd

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Aug 27, 2018 - 11:32am
gryphus, what's your opinion? Comment below:

Non-RE specific Private Credit; still mainly LIBOR flow, have seen some toggles to SOFR. Have been looking at swaption pricing as a gauge for market reception to the rate.

The real problem with using SOFR vs LIBOR, despite the fundamental differences, is that one is tested (despite a scandal or two), and the other is not.

Aug 30, 2018 - 10:12pm
Gold Mansacks, what's your opinion? Comment below:

Completely new to interest rates and economic activity here. Can anyone explain why LIBOR is going to end? I looked online but all I could find were articles that said SOFR would replace LIBOR but nothing on the reasoning behind the end of LIBOR. Any help would be appreciated.

Aug 30, 2018 - 10:33pm
Hank Hill, what's your opinion? Comment below:

My understanding is that the public faith in LIBOR deteriorated after the manipulation scandal. That might be a gross oversimplification, but I think the qualm was how LIBOR was calculated -- that is, based on banks' reporting as opposed to actual transactions.

Array
Aug 31, 2018 - 11:15pm
The Creature, what's your opinion? Comment below:

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