American Banker asks Matthew Tevis about LIBOR alternative rates
Summary
As SOFR gains ground with community and regional banks, Matt Tevis discusses with American Banker what will happen with leading LIBOR alternative rates.
American BankerAs the post-Libor world takes shape, there may “eventually be a winner or two that dominate” the loan market like Libor did, said Matthew Tevis, managing partner at Chatham Financial, which advises banks on the issue.
Banks’ rapid adoption of SOFR makes 2022 a critical year for the two leading alternatives in the United States: the Ameribor rate favored by some midsize lenders and Bloomberg’s BSBY rate, which has gotten traction among other regional and larger banks.
Many in the industry think BSBY and Ameribor have staying power. The next few months, however, will help determine whether SOFR becomes dominant.
As the post-Libor world takes shape, there may “eventually be a winner or two that dominate” the loan market like Libor did, said Matthew Tevis, managing partner at Chatham Financial, which advises banks on the issue.
Banks are using Ameribor and BSBY in certain business loans today, and some of them have made one of the two rates their primary benchmark instead of SOFR. Many bank loans are not public, making it hard to track progress precisely for each benchmark. But regulators, bankers and analysts say that SOFR is further ahead as the Libor transition hits a critical milestone.
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