Intercontinental Exchange (ICE, Financial) acquired 100% ownership of the American Financial Exchange (AFX) from 7RIDGE. AFX is a platform that enables American banks and financial institutions to directly borrow and lend money from each other using the AMERIBOR rate, it is the daily measure rate of unsecured interbank loan on the platform.
ICE manages global financial exchanges that include New York Stock Exchange (NYSE), commodity markets, clearing houses and ICE also provides mortgage technology, data and listing services. As of September 2024, ICE manages around $670 billion in passive investments and about $2 trillion across combined active and passive strategies. The acquisition isn't expected to impact ICE's 2025 financial results or affect its capital return plans.
The acquisition strengthens ICE in interbank lending and with the backing of many banks, AMERIBOR rate offers ICE a competitive edge as market shifts from the old LIBOR rate.
LIBOR is an abbreviation for London Interbank Offered Rate that is a widely used rate but currently has gone through trust issue due to the manipulation issues. SOFR (Secured Overnight Financing Rate) in the United States was chosen has replaced LIBOR due to better reliability and transparency.
And AFX's AMERIBOR stands a chance to SOFR because it caters specifically to a different segment of the banking market. SOFR is backed by U.S. Treasury securities, best for large financial institutions, while AMERIBOR captures the funding rates that are effective for smaller and regional banks through unsecured loans.
