U.S. Markets

Fannie Mae issues first-ever SOFR-based securities

NEW YORK (Reuters) - Fannie Mae on Thursday issued the first-ever securities based on the Secured Overnight Finance Rate (SOFR), an alternative to the London interbank offered rate (LIBOR) which may cease to exist after 2021.

The U.S. mortgage finance agency’s $6 billion, three-part deal will settle on July 30.

The floating-rate securities featured a $2.5 billion six-month tranche priced at SOFR plus an 8 basis point premium; a $2.0 billion 12-month class at SOFR plus a 12 basis point premium, and a $1.5 billion 18-month tranche at SOFR plus a 16 basis point premium, it said in a statement.

Barclays Capital, Nomura Securities International and TD Securities were the lead managers of the transaction.

Reporting by Richard Leong; Editing by Bernadette Baum