Senior Director of Client Services Ruth Hardie Talks LIBOR on AFP Conversations Podcast
At AFP 2019, Ruth Hardie, Hedge Trackers’ Senior Director of Client Services, sat down at the AFP Conversations booth with client Robert Owens, Farmer Mac’s Director of Fixed Income Strategy, to discuss the implications of the LIBOR transition for financial professionals.
During the conversation, Ruth and Robert evaluated the alternative benchmark rate options available to Treasurers – and hedge accounting nuances to consider.
“We’re definitely focused on SOFR because it’s been approved as a benchmark rate by the FASB,” commented Ruth. While AMERIBOR could also be a contender, it has yet to be evaluated and approved by FASB.
Ruth recommends a careful “wait and see” approach until the markets for the replacement rates become more liquid. But she also warns not to be on the tail end of the transition – otherwise, you could get stuck without any leverage. At this point, limiting your LIBOR exposures as best as you can is key. Some organizations have started the process by moving to OIS (overnight index swap).
To listen to the full conversation, click here.