A new SONIA based bond. Does this mark the beginning of the end of LIBOR in public debt markets?

Last week the European Investment Bank (EIB) issued the first public bond based on the reformed SONIA benchmark, marking another step forward in the process of benchmark reform in the U.K. The 5-year, £1bn issue was priced with a coupon of 35bp above overnight SONIA.  The deal may very well serve as a benchmark for future issuance in the LIBOR-less world which the Bank of England and other regu…

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Beware the death of Libor

Guest contributor – David Covey (Financial Institutions Analyst, M&G Fixed Income Team)

The end is coming for the London interbank offered rate (Libor).  Ten years after suspicions emerged that this key interest rate was being manipulated in the financial crisis, regulators are ramping up their efforts to replace the benchmark rates. The Bank of England (BoE) and US Federal Reserve are leading …

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