FHLBanks Surpass $100 Billion in SOFR-linked Issuance
last updated on Wednesday, August 21, 2019 in Business News
The Office of Finance announced that the Federal Home Loan Bank System has issued over $100 billion in SOFR-linked securities since its first issuance in November of last year. SOFR, the Secured Overnight Financing Rate, has been identified by the Federal Reserve’s Alternative Reference Rates Committee as its recommended alternative to U.S. Dollar LIBOR, and the development of the SOFR market is ongoing.
“This week’s transactions bring our total SOFR-linked issuance to $108.35 billion. This important milestone signifies strong investor demand and acceptance of SOFR as the preferred replacement reference rate for LIBOR in our market,” said Randy Snook, CEO of the Office of Finance. The FHLBanks provide access to reliable liquidity to approximately 6,800 members in support of housing finance and community investment. “Our regular and frequent issuance of SOFR-linked securities strengthens the FHLBanks’ ability to meet the current and future needs of our members as we participate in the development of the SOFR index in support of our mission.”
Andre D. Galeano, Deputy Director, FHFA Division of FHLBank Regulation stated, “The leadership of the FHLBanks has been critically important in facilitating the market’s orderly transition away from LIBOR. The FHFA will continue to work closely with its regulated entities as they support the market’s transition to SOFR in a prudent and responsible manner.”
Tom Wipf, Vice Chairman of Institutional Securities at Morgan Stanley, chairs the Alternative Reference Rates Committee, convened by the Federal Reserve Board and the New York Fed to help ensure the successful implementation of the Paced Transition Plan it developed. “The impact of the FHLBank System’s participation on the development of the SOFR market has been significant,” commented Wipf. “The volume and frequency of FHLBank issuance has clearly indicated to market participants the viability of SOFR as the preferred replacement rate for USD LIBOR. We expect other issuers to follow the lead of the FHLBanks as investors indicate a growing preference for SOFR linked debt.”
The FHLBanks have delivered innovation and service to the U.S. housing market since 1932, and currently have approximately 6,800 members serving all 50 states, the District of Columbia and U.S. territories. Please contact Nancy Nowalk at 703-467-3608 or nnowalk@fhlb-of.com for additional information.
- LIBOR
- SOFR