Following the adoption of the Federal Reserve Board’s final rule under the LIBOR Act, Fannie Mae and Freddie Mac announced replacement indices for their legacy London Interbank Offered Rate (LIBOR)-based loans and securities.
As expected, Fannie Mae and Freddie Mac chose a tenor corresponding to the spread-adjusted CME term secured overnight funding rate (SOFR). The transition to replacement indices will take place on the day after June 30, 2023. June 30, 2023 is scheduled to be the last date that Intercontinental Exchange, Inc. (ICE) Benchmark Administration Limited will publish a representative course for all remaining. USD LIBOR tenors. The full transition to the spread-adjusted CME Term SOFR indices will occur within one year. Spread-adjusted CME term SOFR index values will be available from Refinitiv Limited.
Fannie Mae’s and Freddie Mac’s statements also relate to substitute indices for multifamily loans and related mortgage-backed securities, single-family and multifamily collateralized mortgage obligations, and credit risk transfer securities and derivatives.