SBI, IOCL ink India's first Libor alternative rate deal

SBI and IOCL reach an important milestone in Libor transition with a $100 mn deal for 5 years

State Bank of India (SBI) and Indian Oil Corporation Limited (IOCL) will be inking the first SOFR (Secured Overnight Financing Rate) linked external commercial borrowing (ECB) deal as the world moves away from London Interbank Offered Rate (LIBOR), the de facto international benchmark reference rate.  

In a statement, SBI said it will be arranging $100 million for 5 years linked to SOFR.  

The LIBOR will no longer remain the benchmark after December this year. Consequently, the Indian banks are also getting prepared to move from Libor to another benchmark. Secured Overnight Financing Rate (SOFR) and Sterling Overnight Interbank Average Rate