Standard Chartered has successfully completed its first Trade Loan transaction in Hong Kong referencing the USD Secured Overnight Financing Rate (SOFR) for Qatar National Bank (QNB Group).
As the financial markets are moving away from LIBOR and stop entering into new LIBOR contracts starting from 2022, the transaction used the 3-month Term SOFR as a reference rate. It provides a good foundation for the Bank to help its clients navigate through the IBOR transition and adopt the new pricing benchmark early. The cross-border collaboration once again demonstrates the Bank’s unique global network and the role of Hong Kong as an international financial centre.
Samuel Mathew, Global Head of Flow and Financial Institution Trade, Transaction Banking, Standard Chartered, said:
“At Standard Chartered, we are dedicated to meeting our clients’ needs amid the changing market environment. The successful conclusion of this transaction showcases the Bank’s leading position in helping our clients transition to the new interest rate benchmarks. We expect more such deals to be priced with alternatives such as SOFR as the industry moves towards risk free rates and cessation of LIBOR.”
Khalil Geagea, Group Head of Financial Institutions, QNB, said:
“We are pleased to partner with Standard Chartered in this critical transition journey. The IBOR reform has a major impact on the financing market and the way we do our business. This Trade Loan will enable us to facilitate trade flows and meet our clients’ needs for trade finance in our key markets.”