Bank of America has started marketing the first leveraged loan tied to the interest rate that is set to replace Libor, in a milestone for the industry as it transitions away from the disgraced lending benchmark.

The US bank has helped tee up a $3.25bn financing package that includes a $750m syndicated loan based on Sofr — the secured overnight financing rate — to fund the $4.5bn takeover of chicken producer Sanderson Farms by Cargill and Continental Grain, according to people involved in the transaction.

The London interbank offered rate, or Libor, has stood for decades as the benchmark for financial markets, including the loan industry. But a rate-rigging scandal almost a decade ago tarnished its reputation, leading regulators to call for a replacement. The Alternative Reference Rates Committee, created by the Federal Reserve, selected Sofr in 2017.