Mortgage giant reveals list of securities moving from LIBOR to SOFR-based rates
Freddie Mac has released a list of more than 34,000 floating-rate securities transitioning from LIBOR to replacement indices based on the Secured Overnight Financing Rate (SOFR).
LIBOR (or the London Interbank Offered Rate) is used as the base rate for over a trillion dollars of adjustable-rate commercial and multifamily mortgages. In 2019, Fannie Mae and Freddie Mac said they would discontinue purchasing and issuing certain LIBOR-based securities and transition to alternative reference rates like SOFR. The LIBOR cessation was initially set in 2021 but extended to 2023 due to the project’s complexity.
“Freddie Mac today moved another step closer to completing its years-long transition from LIBOR to new SOFR-based reference rates,” said Karen Pilewski, senior director and lead for Freddie Mac LIBOR transition implementation. “The assignment of a fallback reference rate to every remaining LIBOR-indexed Freddie Mac security offers market participants added confidence that their investments will transition seamlessly to the replacement index at LIBOR’s cessation.”
The transition will commence on July 1, the day after the ICE Benchmark Administration ceases publication of a representative rate for all remaining tenors of USD LIBOR.
The securities include Freddie Mac Participation Certificates, Giants, Collateralized Mortgage Obligations, Credit Risk Transfer securities and Multifamily PCs and SPCs, according to the firm’s news release. The list provides a CUSIP, prior index and replacement index for each security. Freddie Mac said it will choose the replacement index.
Freddie Mac posted the list on its website, including links to the LIBOR Transition Playbook, Frequently Asked Questions and Answers about the LIBOR Transition, a table showing the Selected Replacement Index for each legacy LIBOR product, and other relevant information.
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