DBS completes first trade finance transactions on Singapore

DBS completes first trade finance transactions on Singapore

The $25 million transaction, priced off Secured Overnight Financing Rate (SOFR) averages, is an industry milestone as the global interbank offered rate (IBOR) transition gathers pace.

DBS has worked on Singapore’s first export financing transaction referencing the US dollar (USD) denominated SOFR, for global food and agri-business, Bunge.

It paves the way for 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.

This follows ongoing efforts by DBS to help clients transition smoothly to alternative risk-free benchmark rates (RFRs).

“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,” said Tan Su Shan, group head of in.

This is in line with initiatives to help clients transition to RFRs such as the Singapore Overnight Rate Average (SORA) for the Singapore dollar cash and derivatives market.