Adjustable-Rate Loans Transition to New Rate Index

Adjustable-Rate Loans Transition to New Rate Index

In the coming months, Arvest customers, and consumers nationwide, will begin to hear about changes to loan and line-of-credit interest rates that are tied to the London Inter-Bank Offer Rate (LIBOR) index. Arvest prides itself on providing customers with resourceful information about our products and services, and we’re ready to help our customers with this upcoming transition.

Here’s what Arvest customers should know:

LIBOR is an index that banks, including Arvest, use to set the interest rate for many adjustable-rate loans and lines of credit (such as adjustable-rate mortgages, reverse mortgages, home equity lines of credit, commercial loans, credit cards, auto loans and student loans).

After June 30, 2023, LIBOR will no longer be published.

How does this impact Arvest customers with LIBOR-based loans or lines of credit?

If your loan matures after June 30, 2023:

If your loan matures prior to June 30, 2023:

Your lender will reach out soon to ensure your loan will successfully convert to the replacement rate on or before July 1, 2023, which may include an automatic conversion or an amendment to your loan agreement.

Your lender is available to discuss alternative rates to replace LIBOR if you renew or begin a new loan.

Our goal is for customers to experience virtually no financial impact as the industry embraces this stronger rate transparency. For customers with a back-to-back swap loan, the contractual fixed rate derived from the floating rate loan and swap will not change. Customers are encouraged to speak with their local lender to discuss specific impacts from this transition. 

Why is LIBOR going away?

During the last several years, LIBOR has become less an index derived from actual market transactions and more an index determined by participant banks’ estimates of funding costs. Because of this, regulators determined the rate was subject to manipulation and decided that LIBOR should be replaced with a more liquid and transparent rate.

What rates is Arvest offering as alternatives to LIBOR?

Arvest is offering the following rates as alternatives to LIBOR. Customers should speak with their local lender about these rates and what best suits their financial plan.


Secured Overnight Financing Rate (SOFR)1




Federal Reserve Bank of New York; CME Group (Term SOFR)

CBOE Global Markets

Wall Street Journal


Reflects the cost of overnight borrowing and lending in the U.S. Treasury repo market

Based on overnight unsecured transactions conducted on the American Financial Exchange LLC between U.S. banks and financial institutions. Ameribor® Term 30 also incorporates real-world wholesale funding transactions for U.S. financial institutions over a thirty-day period from the DTCC

The base rate on corporate loans posted by at least 70 percent of the 10 largest U.S. banks

Credit sensitive?

No; it is a risk-free rate3



What is SOFR?

SOFR is a secured rate (borrowings collateralized by U.S. government securities) while LIBOR is an unsecured rate (the rate at which banks can borrow from other banks). Because SOFR is not a credit-sensitive rate, the Alternative Reference Rates Committee (ARRC) determined that a small spread should be added to SOFR3. Note that SOFR is a market-derived rate (more liquid and transparent), while LIBOR is more and more a rate based upon participant banks’ estimate of their cost of funding.  

What is the ARRC?

To address risks related to LIBOR, the Federal Reserve Board and New York Federal Reserve jointly convened the ARRC. This committee is made up of a group of private-market participants tasked with:

  • identifying risk-free alternative reference rates for U.S. dollar LIBOR,
  • providing best practices for contract robustness and
  • creating an implementation plan with metrics of success and a timeline for an orderly transition.

Who can I talk to for more information?

Arvest appreciates the trust of our customers as we work to make this a hassle-free transition. If you are an Arvest customer with a loan tied to the LIBOR index and have questions regarding how it may affect you, please contact your local lender.


Disclosure Information:

1 SOFR Rates are published at

AMERIBOR® and AMERIBOR® Term 30 rates are published daily at

The Alternative Reference Rate Committee (ARRC) recommends that a small adjustment or spread be added to SOFR to make it more similar to LIBOR (given that LIBOR is a credit-sensitive rate and SOFR is a risk-free rate). This spread adjustment has been set as the trailing five-year median difference between LIBOR and SOFR and will not change over time. It is published here. That difference has been set at 11.4 bp (0.114%) for the one-month LIBOR vs SOFR spread.