Today Invesco Indexing LLC, an independent index provider owned by Invesco, Ltd., and SOFR Academy, Inc., a digital education and data provider, announce the official launch of the first-of-their-kind USD Across-the-Curve Credit Spread Indices and USD Financial Conditions Credit Spread Indices.

The AXI and FXI indices were developed in partnership between Invesco Indexing and SOFR Academy, Inc. SOFR Academy provides financial education and differentiated market data to empower corporations, financial institutions, governments, and individuals to make better decisions. SOFR Academy is driving the operationalization of AXI and FXI as credit spread add-ons for SOFR for use in lending and derivative markets.

The AXI and FXI indices are forward-looking credit spread indices designed to work in conjunction with the Secured Overnight Financing Rate (SOFR). AXI and FXI work to form a credit-sensitive interest rate when used in combination with Term SOFR, Simple Daily SOFR, SOFR compounded in arrears, or SOFR Averages.

"According to the LSTA, there continues to be a lack of consensus on credit spread adjustments for new SOFR based loans. Now that sustained SOFR-linked markets have developed with a sufficient level of liquidity, we believe that now is an appropriate time to introduce a credit spread supplement for SOFR in response to market demand," said SOFR Academy Chief Executive Marcus Burnett. "Many banks are experiencing challenges with implementing CSAs, from trying to focus on simply securing a renewal in a competitive market, to ensuring the borrower is treated fairly, to not yet having internal consensus on the bank's policy for how to account for CSAs. AXI will help solve this problem," added Burnett.

AXI is a weighted average of the credit spreads of unsecured bank funding transactions with maturities out to multiple years. FXI is an extension of AXI that incorporates data based on transactions of both financial and non-financial corporate debt instruments and is approximately 500% more robust. The Invesco AXI methodology document is available here.

AXI and FXI are calculated daily and published at approximately 9 AM ET, using the prior day's transaction data, on a T+1 basis. The indices will be accessible via market data providers and will be posted publicly on www.invescosofracademyaxi.com. All-in benchmark rates will be calculated and published where across-the-curve credit spreads are combined with variations of SOFR, including a variation of SOFR plus AXI ('SOFRx') and a variation of SOFR plus FXI ('SOFRy').