SOFR (Secured Overnight Financing Rate) is the secured overnight interest rate for US dollar-denominated loans and is published by the New York Federal Bank. SOFR is the recommended replacement benchmark rate of the US and UK financial authorities for USD LIBOR.
The 3-month CME Term SOFR is a rate index based on what the market expects rates to be over the next three-month time period and is the recommended benchmark rate that will replace USD 3-month LIBOR at the end of 2021. Follow this link to CME’s website to find out more on 3-Month CME Term SOFR.
From the start of 2022, Prodigy Finance will begin using this benchmark for all new loans denominated in US Dollars to comply with financial regulation.
How does 3-Month CME Term SOFR affect you?
The 3-Month CME Term SOFR a variable benchmark rate and is published by the CME, the administrator of the index. Prodigy reviews this benchmark rate quarterly by referring to the rates published by the CME and may adjust the interest rate applicable to the loans tracking this benchmark rate, which can change the cost of the money you are borrowing. If you’re interested in learning more about SOFR, click here.