Please click link above to view “Farm Credit SOFR Index” sample.
AgTexas members with existing variable rate loans tied to a common financial market index known as LIBOR should be aware of the need to transition your loan to a different market index.
LIBOR is an index rate that has been used by lending institutions for nearly 50 years to set the variable rates on loans. However, due to changes in world financial markets, LIBOR will be replaced with a new index rate, and will no longer be available for use after 2021.
The Farm Credit System has been working closely with the Farm Credit Administration (our regulator), the U.S. Federal Reserve, large commercial banks and many other market participants for several months to ensure a smooth transition away from LIBOR.
A new variable rate index known as Farm Credit SOFR (Secured Overnight Financing Rate) is available to AgTexas members. The Farm Credit SOFR index is quoted and may be viewed on the Farm Credit Funding Corporation website. Another commonly used variable rate index, Wall Street Prime is available for AgTexas members as well.
It is important that you are aware of the need to identify a new index for your loan prior to the end of 2021. If your loan is scheduled to renew during this timeframe, your lender will present you with options so that you may choose the best variable rate index for your situation. If your loan does not mature during this timeframe, your lender will still contact you in the coming months to present you with options to convert to a new variable rate index or a fixed rate of your choosing.
We will be providing periodic reminders, approximately quarterly, until your loan(s) are moved off LIBOR. In the meantime, you can find general information about SOFR and LIBOR online.
Please direct questions to your loan officer.