The American Financial Exchange (AFX), an electronic exchange facilitating direct lending and borrowing for American banks and financial institutions, has announced its acquisition by 7RIDGE, a specialised growth equity firm investing in transformative technologies for financial services. The acquisition, which closed last week, aims to accelerate AFX’s growth trajectory, expand its network of members borrowing and lending on its platform, and promote further adoption of its unique credit-sensitive AMERIBOR benchmark.
The deal, which follows 7RIDGE’s acquisition of trading platform operator Trading Technologies in November 2021, underscores AFX’s leading position as a provider of credit-sensitive benchmarks to the US lending market. A subsidiary of Cboe Global Markets, Inc. will continue in its role providing hosting, operational and surveillance services to AFX.
Used by a growing network of over 1,000 banks and financial institutions, AMERIBOR is set daily based on observable and competitive transactions in unsecured interbank loans executed on the AFX platform. Focusing on regional, midsize, community, and minority-owned banks, the network represents 25% of the US banking sector’s total assets. AMERIBOR is employed to set floating rates in loans, hedge interest rate risk, and in financial futures, as it closely tracks banks’ actual cost of funding on a daily basis.
Carsten Kengeter, Founder of 7RIDGE, commented: “We see a great opportunity to deliver on the full potential of the infrastructure that AFX has built and the groundwork it has laid over the years. There is an ever-increasing demand for credit-sensitive rates, especially in the current macroeconomic environment. We look forward to working with the AFX team and members to make this exciting vision a reality.”
Dr. Richard L. Sandor, Founder and Chairman Emeritus of AFX, added: “7RIDGE and its team have a proven track record of leadership and success in financial markets worldwide. This transaction positions AFX with the resources and commitment to take the exchange and AMERIBOR to the next level and to expand on the important work of our members in building a transparent and transaction-based benchmark and further build shareholder value.”
Broadhaven Capital Partners and Willkie Farr & Gallagher LLP advised AFX on the transaction, while Proskauer Rose LLP provided guidance to 7RIDGE.
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