MARKETS GLOSSARY
SOFR
Secured Overnight Financing Rate
A benchmark based on overnight transactions in the U.S. Treasury repurchase market.
What does SOFR mean?
A benchmark based on overnight transactions in the U.S. Treasury repurchase market. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
SOFR in context
A commercial loan may reset monthly at one-month Term SOFR plus a lender spread.
Why it matters in financing
SOFR can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related markets terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.