Real estate lender Walker & Dunlop Inc. became the first company to announce a U.S. leveraged loan sale that fully embraces regulators' preferred replacement for the London interbank offered rate (LIBOR), a milestone in the shift away from LIBOR that could finally unleash a flood of copycats.

The $600 million seven-year loan will be benchmarked to the Secured Overnight Financing Rate (SOFR), according to a person familiar with the matter. LIBOR is being phased out because of the rigging scandal that came to light a decade ago, and SOFR is a leading candidate to fill its role.

Once 2022 begins, a wide range of newly issued financial products, including corporate loans, will no longer be able to reference LIBOR—a major challenge since the rate has powered these markets for decades. Those issued before January 1, 2022, can still use LIBOR through mid-2023.