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ARRC Updates its Recommendations for Use of Term SOFR
April 27, 2023The Alternative Reference Rates Committee (ARRC) announced three updates to its recommendations for the use of Term SOFR.
First, the ARRC clarified the scope of “business loans” that may be hedged with Term SOFR swaps. Second, the revised recommendations recognize that end users may enter into Term SOFR basis swaps even when they do not have exposure on Term SOFR cash assets. Third, the ARRC clarified when the liabilities (i.e., the securities) issued in a securitization could use Term SOFR.
