{"id":402161,"date":"2020-12-17T12:04:23","date_gmt":"2020-12-17T17:04:23","guid":{"rendered":"http:\/\/www.marketnewsdesk.com\/?p=402161"},"modified":"2020-12-17T12:04:23","modified_gmt":"2020-12-17T17:04:23","slug":"freddie-mac-clears-path-for-new-index-rate","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/freddie-mac-clears-path-for-new-index-rate\/","title":{"rendered":"Freddie Mac Clears Path for New Index Rate"},"content":{"rendered":"

\nCompany Begins Purchasing SOFR-indexed Products and Launches SOFR-indexed Offerings
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MCLEAN, Va., Dec. 17, 2020 (GLOBE NEWSWIRE) — Freddie Mac (OTCQB: FMCC) today highlighted the key milestones it achieved in 2020 as part of its transition from LIBOR (formally the London Interbank Offered Rate) to the Secured Overnight Financing Rate (SOFR). Freddie Mac made significant progress across the enterprise in support of this important effort for the industry. Among its most recent achievements, in November, the company for the first time began purchasing and securitizing single-family adjustable-rate mortgage (ARM) loans tied to SOFR.<\/p>\n

\u201cFreddie Mac\u2019s 2020 actions continued to prepare us for the future cessation of LIBOR,\u201d said Freddie Mac Interim President Mike Hutchins, executive sponsor of the company\u2019s LIBOR transition effort. \u201cThis was a complex project across the firm with an aggressive set of objectives.\u201d<\/p>\n

Through external engagement with the Federal Housing Finance Agency, Fannie Mae and other parties, including participation on the Alternative Reference Rates Committee (ARRC) and its working groups, Freddie Mac also launched new SOFR-indexed offerings and announced the discontinuation of LIBOR-indexed products.<\/p>\n

\u201cAs an active member of the ARRC and many of its subcommittees, we worked with the industry to understand how different conventions of overnight SOFR can be used in our products and offerings,\u201d said Ameez Nanjee, Vice President, Asset Liability Management and Freddie Mac\u2019s official representative to the ARRC.<\/p>\n

Although recent proposals in the United Kingdom indicate that LIBOR\u2019s cessation date may be extended from the end of 2021 to mid-2023, Freddie Mac remains committed to preparing for a transition to alternative reference rates as soon as practical. The company plans to cease purchasing LIBOR-based products by December 31, 2020 and will continue developing liquidity in SOFR-based products. Freddie Mac will share additional information about its LIBOR transition efforts and milestones once the relevant U.K. parties have announced their final plans for LIBOR\u2019s cessation.<\/p>\n

Key accomplishments for 2020 included:<\/p>\n

Single-Family<\/p>\n