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SouthState Commercial Loan Update

Navigating the LIBOR Transition to SOFR

What Your Business Needs to Know

Because of regulatory concerns with manipulation of LIBOR, the industry has discontinued the use of LIBOR as a benchmark index and adopting more reliable indexes for new instruments. LIBOR was last published on June 30, 2023.

As a result, the replacement indices we are using for new or renewing loans are the 1, 3 and 6 Month CME Term SOFR Rates (Secured Overnight Financing Rate) published by CME Group Benchmark Administration Limited.
What You Need to Know

What You Need to Know

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Icon for What You Need to Know
  • Customers with a LIBOR-based loan were transitioned to a new index immediately after June 30, 2023. The President signed the Adjustable Interest Rate (LIBOR) Act (the “Act”) into law in March 2022. Under its terms, SouthState’s LIBOR based loans were transitioned to SOFR as provided by the Act and the final rule adopted by the Board of Governors of the Federal Reserve.
  • Because LIBOR is a component used to determine the Swap Rate index, that index is  no longer available after June 30, 2023. The Act does not apply to Swap Rate loans. SouthState’s Swap Rate loans were transitioned to the SOFR ICE Swap Rate index.
  • If you have any questions about the transition from LIBOR to SOFR, please contact your Commercial Loan Relationship Manager for additional details.
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Additional Information

Listed below are various resources with additional information regarding the transition from LIBOR to SOFR.
Frequently Asked Questions

Frequently Asked Questions

LIBOR (London Interbank Offered Rate) is a benchmark index used by banks to determine interest payments for financial products with variable or adjustable rates such as commercial loans.

Regulators found discrepancies in the data used to compile LIBOR and determined that banks must use a more reliable index. Thus, LIBOR ceased for new instruments at the end of 2021 and was last published on June 30, 2023.

SOFR (Secured Overnight Financing Rate) is a rate index which has been selected by many lenders that is more firmly based on market transactions. In contrast to LIBOR, which determines rates based on opinions of panel banks, the SOFR index is based on a broad view of transactional data related to the cost of borrowing cash overnight through the repo markets in the U.S.

No. This transition occurred worldwide. Due to changes in the financial industry and the possible manipulation of LIBOR, there was a shift globally to move away from LIBOR to more reliable indices, such as SOFR.

LIBOR or Swap Rate based loans transitioned to SOFR under the terms of the Act, or the SOFR ICE Swap Rate index, respectively, immediately after June 30, 2023.

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