Legacy LIBOR Transition
With Freddie Mac's announcement on January 13, Multifamily’s transition from using LIBOR as the index for legacy floating-rate loans and securities to using SOFR is nearing completion. After June 30, 2023, Freddie Mac Multifamily will transition from using LIBOR to spread-adjusted 30-Day Average SOFR (SOFR) as the index rate for legacy floating-rate loans and securities. The trustees for Freddie Mac’s legacy LIBOR floating-rate securities are expected to make the same transition where they are the determining party.
Here are critical transition dates* to keep in mind:
- June 30: The last day LIBOR will be published and the final index Determination Date where LIBOR will be used for legacy LIBOR loans and securities
- July 31: First index Determination Date where SOFR will be used for legacy LIBOR loans and securities
- September 1: First loan payment date with interest accrual indexed to SOFR
- September 25: First securities Distribution Date with interest accrual indexed to SOFR
*These dates are specific to the substantial majority of legacy LIBOR-indexed K, Q, SB and ML securities; Multi PCs®; and the loans collateralizing them.
As a result of this development, Freddie Mac Multifamily will also refrain from taking any steps that would result in the conversion of any existing SOFR-indexed floating-rate loans and securities from 30-Day Average SOFR to term SOFR based on any provision that calls for such conversion when operationally, administratively and technically feasible, as determined by Freddie Mac.
Freddie Mac Multifamily is committed to keeping you updated on the very latest. If you have questions, or feedback, please send us an email.
We appreciate your partnership and look forward to a smooth transition.