Bloomberg Short-Term Bank Yield Index (BSBY) provides a series of credit sensitive reference rates. BSBY was used in the US loan market as a replacement reference rate for USD LIBOR, which has been phased out as a reference rate. Other USD LIBOR-alternative reference rates include Term SOFR, Daily Simple SOFR, and Ameribor.

The Alternative Reference Rates Committee (ARRC) identified Secured Overnight Financing Rate (SOFR) as the most suitable alternative reference rate for USD LIBOR. According to market commentators, Term SOFR is the preferred replacement rate for LIBOR among US syndicated loan market participants, although BSBY has also been used. According to market participants, BSBY was more popular with regional banks and was also used in bilateral deals.

Administered by Bloomberg Index Services Limited (BISL), BSBY incorporated bank credit spreads and defined a forward term structure. The index was available for five tenors and was calculated each day and published at 8:00 am EST on each US business day.

For more information on BSBY and LIBOR transition, see Practice Note, What's Market: LIBOR Interest Rate Provisions and Loan Agreement LIBOR Fallback Checklist.

On September 13, 2023, BISL released a consultation that proposed the cessation of the publication of BSBY, which has been published daily by BISL since March 2021 (see Legal Update, BISL Releases Consultation on BSBY Cessation). The consultation review period closed on October 13, 2023. On November 15, 2023, following review of the consultation feedback, BISL announced the future permanent cessation of BSBY, to take effect on November 15, 2024.