ICICI Bank executes first term loan derivative deal linked to SOFR

ICICI Bank NSE 1.84 % executed its first term loan and cross currency swap derivative transactions linked to Secured Overnight Financing Rate (SOFR), the bank said in a release.

The transactions were carried out with a corporate client through the Bank’s International offices. The value of the transaction will be a tiny one going by the industry trend.

“Transaction value would be in the range of $15-20 million,” said a market source.

These transactions pointed to the bank’s preparedness towards smooth transition from USD LIBOR (London Interbank Offered Rate) to transactions linked to Alternative Reference Rates (ARR). In January 2021, the Bank had executed its first interbank money market transaction linked to SOFR, which has been identified as the replacement for USD LIBOR.

“With the slew of measures announced by regulators globally, there is an increased shift towards ARR linked products in markets,” said B. Prasanna, Group Head – Global Markets, Sales, Trading and Research, ICICI Bank said. “As the cessation deadline approaches, the liquidity in ARR linked products will increase and ICICI Bank is ready to widen its product suite to meet the customer requirements.”

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