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Brookline Pioneers Use Of New AMERIBOR® Benchmark Interest Rate

Date 06/03/2019

Brookline Bank, a subsidiary of Brookline Bancorp, became the first bank in the Northeast to index a commercial loan to the American Interbank Offered Rate (AMERIBOR®). AMERIBOR® is a new benchmark interest rate created by the American Financial Exchange (AFX). AMERIBOR® reflects the true unsecured funding costs for a nationally broad base of U.S. banks and financial institutions.

AFX is a centralized, electronic, self-regulated, fully transparent platform that was launched in partnership with Cboe Global Markets, Inc. (Cboe) in 2015. AFX facilitates the determination of AMERIBOR®, a transaction-based interest rate benchmark. The rate is calculated every day after the close of trading on AFX as the transaction volume weighted average daily interest rate in the AMERIBOR® overnight unsecured loan market. AMERIBOR® is published on Bloomberg terminals under ticker symbol AMBOR. AMERIBOR® enables banks and financial institutions to optimize asset-liability management by matching assets and liabilities through the common benchmark AMERIBOR®.

“Brookline is a founding member of the American Financial Exchange and is piloting a loan product with approximately $40 million indexed to the AMERIBOR® benchmark interest rate. AMERIBOR® is based on real, verifiable transactions that capture the true cost of unsecured borrowing for AMERIBOR® participating institutions.” said Carl M. Carlson, Brookline’s chief financial officer.

“AFX congratulates Brookline for their leadership in using AMERIBOR® as the reference interest rate benchmark for a commercial loan. This is yet another milestone in the growing acceptance of AMERIBOR® as an alternative benchmark.

Other AFX Members are actively in the process of using AMERIBOR® to benchmark new issuance assets. This will have a tremendous impact in the conversation about the transition to new interest rate benchmarks. Banks, financial institutions and the customers ultimately all benefit when more choices are available,” said Dr. Richard L. Sandor, Chairman and CEO of AFX.