MUMBAI:
YES BANK, has executed its first Secured Overnight Financing Rate (SOFR) linked transaction. The said transaction was a trade borrowing availed from Wells Fargo Bank and will provide further impetus to the Bank’s export finance business.
The transaction is part of the Bank’s benchmark transition management plan and is the first step towards a smooth transition to the new Alternative Reference Rates (ARR). 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.
Commenting on the transaction, Ashish Agarwal, Global Head – Wholesale Banking, YES BANK said, “This transaction is a testimony to availability of the borrowing pool for YES BANK and our strong relationship with global banks. 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.”
Santanu Sengupta, Managing Director & Head, CIB – FIG, APAC South, Wells Fargo Bank added that, “As the global financial markets transition from LIBOR to Alternative Reference Rates, we are delighted to partner with Yes Bank on their first SOFR benchmarked loan. Wells Fargo has played a leading role in this important industry initiative and we continue to work with our partners to prepare for the LIBOR transition by year end.”
