Understanding alternative reference rates

The recommended alternative for USD LIBOR is the Secured Overnight Funding Rate (“SOFR”). There are 5 additional benchmark rates and/or spread adjustments that have been proposed to replace LIBOR. These alternative benchmarks generally capture the cost of unsecured bank borrowing, which is the cost that LIBOR also reflects and which is a rate that is more relevant to the way many banks fund themselves than SOFR, which is a secured overnight rate based on transactions in the U.S. Treasury securities.

In our latest Momenta insight, we look at each of these 5 alternative benchmark rates, and analyse how they differ from one and other.

Download our latest insight