Moving Off Libor? Here's How Easy It Is With PrecisionLender

"What's your plan for moving banks off Libor?"

It's a question we've been getting quite a bit recently during sales conversations with banks. And it's understandable. From their perspective, moving off Libor to another pricing index, like SOFR, for example, is a very significant step. To do it, you need a plan.

We know there's a lot to think about in terms of this switch, and we've detailed the important questions you need to answer in this post. 

But when it comes to the mechanics of switching off Libor, you don't need an elaborate plan if you're already a PrecisionLender client. You just need a mouse. 

That's because we've already built in the SOFR index into our platform. If you want to make the switch, here's what that entails. 

Making the Switch

First, just click on the administration button on the lower left of the home screen. Then select "Products" from the left-side menu. Select a product - say Commercial Real Estate, Owner Occupied - then click on the "Edit" button on the top left corner of the screen. 

Now you're ready to move off Libor.

Step 1 - Scroll down to the Index Families. 

Step 2 - Click to uncheck the box next to Libor.

Step 3 - Click to check the box next to SOFR.

That's it. Seriously. 

Not interested in using the SOFR index? There are several other options, which you can learn more about here, including creating a Custom Funding Index. 

Assumption Versioning

We've also handled assumption versioning for you. Every deal your bank priced before the switch can still use whatever was index was in place at the time. We can flag these opportunities to make it easier for you to keep track. Meanwhile, every deal going forward will only be able to use SOFR, making it easy to enforce an official changeover date. 

Repeat that for each product and voila! You've executed your post-Libor plan!

It really is that simple in PrecisionLender. 

About the Author

Jim Young, Director of Content at PrecisionLender, is an award-winning writer with experience in a range of positions in media and marketing, from reporter to website editor to content marketer. Throughout his career Jim has focused on the story – how to find it, how to understand it, and how best to share it with others. At PrecisionLender, he manages the many ways in which the company shares its philosophy on banking and the power of relationships. Jim graduated Phi Beta Kappa from Duke University and holds a masters degree in journalism from Columbia University.

Follow on Linkedin More Content by Jim Young