What is SOFR?
The Secured Overnight Financing Rate, the most common benchmark for US dollar floating-rate loans and interest rate swaps.
Learn “SOFR” in an animated lesson
- Interest Rates & SwapsHedging a Floating-Rate Loan with a Swap
A company has a floating-rate loan and fears rising rates? Add a "pay fixed, receive floating" swap and the cost is locked in as fixed.
- Interest Rates & SwapsInterest Rate Swaps (IRS)
One side pays a fixed rate and the other pays a floating rate, and they exchange only the net interest. Watch the cash flows go back and forth along the timeline.
Related terms
See how “SOFR” works for yourself with an animation you can drag and play.
Go to “Hedging a Floating-Rate Loan with a Swap”