Fractured Libor transition halts US structured rates switch
Issuance of non-Libor caps and floors dries up as lending markets mull array of credit-sensitive SOFR rivals
Attempts to shunt US interest rate option products onto Libor replacements has stalled amid growing uncertainty over which benchmark will succeed the discredited rate for US dollar lending markets.
Dollar-denominated caps and floors, which protect lenders and borrowers against interest rate fluctuations, still predominantly reference US Libor. Similar instruments linked to the secured overnight financing rate (SOFR) – the US regulator’s preferred risk-free successor – have struggled to gain
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