Industry Participants Now Able to Utilize IHS Markit Benchmarks in Creation of Non-retail Financial Products

IHS Markit, a world leader in critical information, analytics and solutions, today announced its series of forward-looking dynamic term benchmarks that measure the daily US Dollar (USD) cost of funding in institutional markets are now able to be utilized to create non-retail financial products. These benchmarks include the IHS Markit USD Credit Inclusive Term Rate (CRITR) and the IHS Markit USD Credit Inclusive Term Spread (CRITS), which are designed to provide banking institutions a broad measure of USD funding costs on a senior unsecured basis.

The publication of the CRITR and CRITS benchmarks started on 1 June 2021, including 5 years of historical data. IHS Markit is now allowing industry participants to use these benchmarks in the creation of non-retail financial products. The rates will continue to be updated daily at 8am ET, in alignment with SIFMA's holiday calendar. The benchmarks are available in the following tenors: overnight, 1-month, 3-month, 6-month, and 12-months.

CRITR and CRITS are the first credit sensitive benchmarks based on extensive constituent bases - they track most USD institutional certificates of deposit, commercial paper and short-term corporate bond transactions using a publicly disclosed, robust rules-based methodology and compliance framework. The methodology was developed and refined by working closely with market and industry participants. The CRITS benchmark does not impede the adoption of the rate recommended by the Alternative Reference Rates Committee (ARRC) and addresses concerns of market participants who want to use SOFR but need a credit sensitive component.

"The market requires a straightforward and robust solution for firms transitioning their exposure before USD LIBOR publications cease on 30 June 2023," said Julien Rey, executive director and head of the LIBOR transition program, IHS Markit. "The IHS Markit USD CRITR and CRITS benchmarks, created through an extensive development process, offer a series of dynamic rates that measure U.S. Dollar cost of funding in institutional markets, enabling institutions to create non-retail financial products indexed to a rate or a spread adjustment compliant with the UK Benchmark Regulation and the IOSCO Principles for Financial Benchmarks."

The benchmarks are administered by IHS Markit Benchmark Administration Ltd. (IMBA UK) in compliance with the UK Benchmark Regulation and the IOSCO Principles for Financial Benchmarks.

For more information on IBOR Transition offerings from IHS Markit click here.

Posted 02 February 2022 by Julien Rey, Executive Director, Head of EMEA Business Development, Derivatives Services, S&P Global Market Intelligence

S&P Global provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.