17 global dealers transition their legacy LIBOR swaption inventory, multilaterally switching more than 17,000 trades

Capitolis, the financial technology company, announced today that it has successfully completed its run of multilateral exercises to transition legacy USD LIBOR-referenced swaptions to vanilla SOFR replacements for 17 global dealers. Through nine live executions, Capitolis, and Capitalab prior to its acquisition by Capitolis last year, facilitated the multilateral switching of over 17,000 legacy LIBOR swaptions across their dealer network. As a result, participants have eliminated the significant operational burden of expiry management associated with legacy LIBOR swaptions.

Issues with pricing legacy USD LIBOR swaptions first became prominent in 2020, when major clearinghouses transitioned from Fed Funds to SOFR discounting for USD swaps. This led to bifurcation in the USD swaption market, introducing complexity and increased time demands for rates volatility desks. More recently, a major clearinghouse ceased support for clearing exercised legacy LIBOR swaptions on June 30, 2025, further increasing operational complexity for market participants.

In response to client concerns about their remaining LIBOR swaption inventory, Capitalab (now Capitolis) worked closely with the dealer community to design and deliver a scalable solution. Within just two months, it launched a proof-of-concept run with nine dealers. Since then, nine successful multilateral runs have been completed, collectively transitioning over 17,000 trades. Participants are now left with a cleaner, simpler book of vanilla SOFR swaptions, significantly reducing complexity and ongoing operational risk.

“This initiative demonstrates the strength of collaboration across the industry and the power of innovation to solve real-world problems,” said Gavin Jackson, Co-Head of Portfolio Optimization, Capitolis. “The successful transition of such a large volume of trades reflects the trust our clients place in Capitolis as well as their commitment to progress and willingness to work with us to achieve it. We’re incredibly grateful for their support, engagement, and partnership to deliver this important solution at scale.”

“We’re happy to have participated in this industry-wide effort led by Capitolis,” said Yashodeep Honmane, Head of US Rates Options, Barclays. “Their multilateral solution delivered immediate operational relief, streamlined our swaptions portfolio ahead of the June 2025 clearinghouse cut-off, and drove meaningful efficiency gains. The process was collaborative, risk-reducing, and a clear demonstration of Capitolis’ leadership in this space.”

Most market participants now have few LIBOR swaptions remaining. Capitolis is prepared to run ad-hoc cycles based on additional demand.

About Capitolis

We believe the financial markets can and should work for everyone. Capitolis is the technology company helping to create safer and more vibrant financial markets by unlocking capital constraints and enabling greater access to more diversified capital and investment opportunities. Rooted in advanced technology and deep financial expertise, Capitolis powers groundbreaking financial solutions that drive growth for global and regional banks – and institutional investors alike. Capitolis is backed by world class venture capital firms, including Canapi Ventures, 9Yards Capital, SVB Capital, Andreessen Horowitz (a16z), Index Ventures, Sequoia Capital, Spark Capital, and S Capital, as well as leading global banks such as Barclays, Citi, J.P. Morgan, Morgan Stanley, Standard Chartered, State Street and UBS.

Founded in 2017, our team brings decades of experience in launching successful startups, technology, and financial services. Capitolis was recognized on the Inc. 2024 Best in Business list in the Financial Services and Innovation & Technology categories, and named World’s Best FX Software Provider for the second straight year in the 2024 Euromoney Foreign Exchange Awards. The company has been included on each of CNBC’s World's Top Fintech Companies 2024 list and Deloitte’s 2024 Technology Fast 500 list in consecutive years and was named to Fast Company’s prestigious annual list of The World’s Most Innovative Companies for 2023. American Banker recognized Capitolis among the Best Places to Work in Fintech, and the company was named by Crain’s New York Business as one of New York’s Best Places to Work in 2024 for the third consecutive year. For more information, please visit our website at www.capitolis.com or follow us on LinkedIn.

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