SOFR Gaining Momentum as Drop Dead Date for Libor Nears -

"Transition from US dollar Libor to its preferred alternative, SOFR, is going surprisingly well, though treasurers are having to grapple with some operational issues."

Why this is important: The demise of LIBOR will occur a year from now, and this article recaps the progress of lenders and borrowers in moving to the preferred replacement, the Secured Overnight Funding Rate or “SOFR.” Since the start of 2022, the U.S. Fed has seen a clear shift to SOFR, in both syndicated and non-syndicated loans. The article touches on some of the hurdles to the transition, including the existence of various versions of SOFR, the fact that existing derivative products are largely based on LIBOR, and that SOFR is generally a backward-looking rate whereas LIBOR is forward-looking. These problems make borrowers slower to make the transition.