Indian Oil awards mandate to SBI for first SOFR-linked ECB deal
State Bank of India (SBI) has been awarded the mandate for the first SOFR (Secured Overnight Financing Rate) linked ECB deal by Indian Oil Corporation Ltd. (IOCL).
SBI and IOCL have reached a milestone in LIBOR transition with a $100 million deal for 5 years and this will be the first SOFR linked deal in the External Commercial Borrowing (ECB) market.
SOFR is an identified replacement for USD LIBOR, which is expected to be phased out at the end of 2021.
The sunset has been triggered by the decision of Financial Conduct Authority (FCA) in UK not to compel contributing banks for LIBOR calculation after December 2021.
C. Venkat Nageswar, Deputy Managing Director (International Banking Group), said by availing the first SOFR linked ECB, IOCL would set the pace for smooth transition by Indian corporates to Alternate Reference Rates (ARR) mechanism.
