Private sector lender Yes Bank has executed its first Secured Overnight Financing Rate (SOFR) linked transaction.
SOFR is an identified replacement for USD LIBOR (London Inter-Bank Offered Rate), which is likely to be phased out at the end of 2021.
“The transaction was a trade borrowing availed from Wells Fargo Bank and will provide further impetus to the bank’s export finance business,” Yes Bank said in a statement, adding that it is part of its benchmark transition management plan and is the first step towards a smooth transition to the new Alternative Reference Rates (ARR).
“This is an on-balance sheet transaction and is an industry-first onshore foreign currency borrowing on the SOFR benchmark. The bank will take strides towards adopting the new standards in the global context and this borrowing will support the bank’s endeavour to transition and adopt the new ARR,” said Ashish Agarwal, Global Head, Wholesale Banking, Yes Bank.
Santanu Sengupta, Managing Director and Head, CIB – FIG, APAC South, Wells Fargo Bank further said, “As the global financial markets transition from LIBOR to ARR, we are delighted to partner with Yes Bank on their first SOFR benchmarked loan.”