Starting later this month, Marsoft will be tracking and publishing a new benchmark interest rate in the wake of LIBOR’s elimination from the banking market after 52 years. Unlike term LIBOR rates which embed a measure of credit risk, SOFR (Secured Overnight Financing Rate) is an overnight, secured rate that is nearly risk-free, and it will generally lie below LIBOR. Marsoft Flagship users will have the option to apply a credit adjustment spread on top of SOFR that will limit any change in economic value as a result of the LIBOR-to-SOFR switch.
Historically, Marsoft has published 3-month LIBOR averages quarterly as a benchmark rate option in our proprietary portfolio management software. Going forward, we will offer a 90-day SOFR average benchmark in addition to continuing to publish LIBOR rates as they remain available for the next year.
While historical interest rates are available publicly via the Federal Reserve and other sites, Marsoft will also publish a forecast of SOFR rates available for all Flagship system users. Marsoft assumes rates will rise to the historical median as calculated over the period 2001-2021.