Even as the financial community reluctantly lets go of LIBOR as the world's long-standing benchmark rate, Freddie Mac is ploughing forward with its own efforts to adopt the Secured Overnight Financing Rate, or SOFR, the rate banks use to price US dollar-denominated derivatives and loans. This is one of the main replacements for LIBOR.
The government-sponsored enterprise just rolled out its latest offering of K-Certificates and it includes classes of floating rate bonds indexed to SOFR and backed by underlying mortgages that are also indexed to SOFR. The $991.5 million in K Certificates are expected to price on or about December 8, 2020.
The offering is the first of its kind as previous SOFR-based K-Deal floating rate bonds were backed by LIBOR-based underlying mortgages. The offering also includes classes of floating-rate bonds indexed to LIBOR and backed by underlying mortgages that are indexed to LIBOR.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
