Secured Overnight Financing Rate
The Secured Overnight Financing Rate (SOFR) is a broad, nearly risk-free benchmark that measures the cost of overnight borrowing collateralized by U.S. Treasury securities, based on actual repurchase agreement (repo) market transactions and published by the Federal Reserve Bank of New York.
Example: A floating-rate note might reset its coupon quarterly to a rate based on the daily SOFR, with payments settled using the observed SOFR values from the prior period.
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