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Americas – IBOR Transition

Data coverage across the North American alternative reference rate market.

In a constantly evolving environment, financial institutions need to choose a data and analytics partner that is committed to agility and delivering timely new functionality for their business.

Why did the IBOR Transition take place in America?

The IBOR (Interbank Offered Rate) transition in America was a significant change to the way financial markets operate. IBORs are benchmark interest rates that are used to price trillions of dollars’ worth of financial products, including mortgages, loans, and derivatives. However, in recent years, regulators have determined that these rates are not sufficiently robust, and USD LIBOR was phased out on 30th June 2023.

How has the IBOR Transition affected financial markets in America?

The transition away from IBORs in America affected a wide range of financial products, and market participants will need to make significant changes to their systems and processes. However, the transition has also brought a number of benefits to the financial services industry. For example, the new Alternative Reference Rates, such as the Secured Overnight Financing Rate (SOFR), are based on actual transactions in the market, rather than the estimates and submissions used to calculate IBORs.

In addition, the transition has improved the transparency of financial markets, and reduced the potential for manipulation. It will also align the financial markets more closely with the underlying economy, providing more accurate pricing for borrowers and lenders.

What are the new Alternative Reference Rates in America?

The new alternative reference rates for the USA are:

SOFR (Secured Overnight Financing Rate), which has been published since April 2018 by the Federal Bank of New York (Fed).

AMERIBOR (the American Interbank Offered Rate), which has been published since 2015 by the American Financial Exchange (AFX).

BSBY (Bloomberg Short-Term Bank Yield) Index, which has been published since April 2021 by Bloomberg Index Services.

What are the new alternative reference rates in Canada?

The new alternative reference rate for Canada is:

In Canada, CAD CDOR has been replaced by CORRA(Canadian Overnight Repo Rate Average). Enhanced methodology was recommended and Bank of Canada (BOC) took over publication of this rate in June 2020.

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