Fannie, Freddie reveal Libor shift prepares

Fannie Mae and Freddie Mac today revealed strategies to shift tradition Libor loans and securities to the Secured Overnight Financing Rate, the Alternative Reference Rates Committee’s chosen Libor option. The shift will happen July 1, 2023, the day after Libor is formally arranged to sunset. In specific news release, the GSEs detailed their shift prepare for a variety of particular items, consisting of single-family variable-rate mortgages and associated mortgage-backed securities, derivatives and others.

“​​​​​The announcement of replacement rates for their Libor-indexed​ products today by Fannie Mae and Freddie Mac represents one of the closing milestones in the transition to more robust reference rates to replace Libor,” stated Federal Housing Finance Agency Director Sandra Thompson. “FHFA and its regulated entities have worked closely with the Alternative Reference Rates Committee and the official sector to ensure a transparent and smooth transition.”


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