Jul 1, 2019

Sonia rate makes loan debut with National Express deal

National Express has become the first company to take a loan priced using the reformed interest rate benchmark Sonia, as financial markets turn to the huge task of moving their biggest contracts off Libor, the tainted lending rate benchmark. Last week Andrew Hauser, executive director for markets at the Bank of England, described the Libor rate as "Past its sell-by date". UK regulators have preferred the market uses a rate known as Sonia for deals priced in sterling. NatWest will price the loan by applying a daily compounded rate, with a five-day reset lag, which has been the main convention the market has used to date. Ashurst acted as legal adviser on the National Express deal.

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