The Federal Home Loan Bank of Chicago (FHLBank Chicago) participated in a Secured Overnight Financing Rate (SOFR)-indexed floating rate note issuance this month as we continue to prepare for the phase out of the London Interbank Offered Rate (LIBOR) by December 31, 2021.
SOFR, a broad measure of the cost of overnight cash borrowings collateralized by U.S. Treasury securities, has gained traction in the market as the likely LIBOR alternative.
What's next for FHLBank Chicago?
We continue to monitor market developments associated with the LIBOR transition to SOFR, such as:
- Fallback methodologies for loans, securities, derivatives, and debt instruments linked to LIBOR;
- Building a SOFR curve using market instruments.