DBS Bank has, on June 23, announced the completion of its first export financing transaction referencing the USD Secured Overnight Financing Rate (SOFR) with Bunge, a global food and agri-business.
The transaction is also a first in Singapore.
The US$25 million ($33.6 million) transaction is priced off SOFR Averages as the global Interbank Offered Rate (IBOR) transition gathers pace.
It is said to also cement Singapore’s status as a global trade hub.
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According to DBS, such transactions will enable DBS’s institutional clients to transition their trade financing instruments away from USD LIBOR as a reference rate, ahead of the December 2021 cessation guidance issued by the Federal Reserve Board, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.
“The global IBOR transition is a hugely complex endeavour, and we are leveraging our deep market expertise to help our clients make sense of these changes. We are pleased to partner forward-looking companies such as Bunge in pioneering trade financing instruments that are a fit for the new interest rate benchmark landscape,” says Tan Su Shan, group head of institutional banking at DBS.
“In doing so, we are entrenching Singapore’s position as a trusted and reliable trade nexus that is well prepared for the broader changes taking place in the financial markets,” she adds.
As at 3.50pm, shares in DBS are trading 10 cents higher or 0.3% up at $29.50.
Photo: Bloomberg
