“Transition from LIBOR to ARR is a critical event in financial markets,” said B. Prasanna, Group Head – Global Markets, Sales, Trading and Research, ICICI Bank. “The transaction is part of the transition initiatives by the bank.”
The bank’s Hong Kong branch executed the transaction on Wednesday. The move was a part of the preparedness towards a smooth transition to the new Alternative Reference Rates (ARR), the bank said in a release.
“With these transactions, we are working towards building internal capabilities to transition to the new ARRs in line with various regulatory timelines,” said Sriram H. Iyer, Head-International Banking, ICICI Bank.
SOFR has been identified as the replacement for USD LIBOR (London Interbank Offered Rate). Globally, there is a move to migrate from LIBOR to transactions linked to ARRs. It is expected that fresh transactions after December 2021 would not be referenced to LIBOR.