Unilever and J.P. Morgan entered into a $500 million interest rate swap agreement at the end of September using the new SOFR benchmark interest rate, in one of the first major long-dated corporate SOFR swap transactions, according to the U.S. bank.

The Secured Overnight Financing Rate (SOFR) is published by the New York Federal Reserve and regulators want it used to back dollar-based derivatives and loans to replace the Libor benchmark rate.

Regulators are putting pressure on market participants to change references from Libor to alternative rates such as those compiled by central banks by the end of 2021.

While SOFR has been used by banks and financial institutions, it has so far yet to be adopted more broadly by corporates in the use of their funding needs.

Further some European corporates with exposure to euro interest rates could soon start using the European Central Bank compiled ESTR short-term rate in swap transactions to replace the Eonia rate that is being discontinued at the end of next year.

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