What lending rate will replace LIBOR as the basis for variable rate debt contracts currently in the debt financing mix of many nontraded REITs?
Answer: LIBOR is a scandal-plagued benchmark that is used to set the price of trillions of dollars of loans and derivatives globally. A group of banks and regulators in 2017 settled on a replacement created by the Federal Reserve known as the secured overnight financing rate, or SOFR. Companies must move away from LIBOR by the end of 2021, when banks will no longer be required to publish rates used to calculate it.
