More corporate loans linked to a new financing rate have been completed in Hong Kong, as the city joins other financial hubs around the world in preparing to move away from Libor.
Oversea-Chinese Banking Corp. provided two loans referencing the Secured Overnight Financing Rate (SOFR) in Hong Kong, the bank said in an emailed statement Monday. The development comes after Hong Kong got its first corporate loan linked to SOFR in December.
Global regulators are driving the transition to alternative risk-free rates to replace the London interbank offered rate that was tainted by a rate-rigging scandal but still underpins hundreds of trillions of dollars worth of financial assets. The ICE Benchmark Administration Ltd. late last year said it was consulting on plans to extend the retirement date for some Libor U.S. dollar rates until late June 2023, although regulators have been pushing for banks to move away from the benchmarks as soon as they can.
For its part, Singapore signaled last week that banks and borrowers from the city-state should stick to the original end-2021 deadline despite the proposed delay.
OCBC said in November that it had completed a green loan based on the Singapore Overnight Rate Average (SORA) with local developer Tong Eng Group, its third corporate loan tied to the new Singaporean dollar benchmark. The bank had earlier signed the country’s first SORA-linked loan in June last year.