EIB shrugs off term RFR worries with Sonia bond plan

Issuer to use daily compounded, backward-looking rate with time lag for sterling benchmark

EIB Group headquarters
Photo: EIB

The European Investment Bank is preparing to wean the sterling primary bond market off tainted Libor benchmarks with plans for a floating rate note linked to the Sterling Overnight Index Average (Sonia). The trade, which is expected to price in the coming days, is being viewed as a possible blueprint for how future bond issues will be structured against risk-free overnight rates that lack a forward term structure.

The EIB, the second biggest issuer of sterling debt after the UK’s Debt Managemen

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