Navigating the Transition From LIBOR to SOFR

Global finance is in the middle of a multi-year transitionary phase out of LIBOR as an accepted global benchmark rate, which should become official in mid-2023. While the effects of LIBOR’s demise and its most likely successor, SOFR (the Secured Overnight Funding Rate), have been widely analyzed, scrutinized, and debated among regulators, the largest financial institutions, global governmental agencies, and top industry advisors, the end user of consumer loans and OTC Derivative products may not have placed this looming rate change at the top of their to-do-list. As a commercial real estate borrower, how much exposure will this rate conversion have on your portfolio? We’re here to help.

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LIBOR to SOFR Conversion Calculator

Your Lender’s fallback language and spread adjustment for your floating rate loan may differ from the ISDA Protocol that governs fallback specifics for your hedge. Use our Spread Adjustment Loss Calculator to visualize any exposure between your Loan and respective Hedge product (Swap/Cap).

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Should you have any questions, need help filling out the calculator, or would like to learn more, our team is here to help.