Lloyds plans £4bn Sonia shift for covered bond extension clause
Consent solicitation aims to flip one-year Libor-linked grace period on fixed instruments to RFR
Lloyds Bank is aiming to future-proof more than £4 billion ($5.26 billion) of fixed rate covered bonds by re-hitching a Libor-linked extension period to the discredited benchmark’s successor risk-free rate, Sonia.
The January 6 proposal, which covers four separate instruments, would apply only to an ‘extended due for payment date’ clause which forms part of the issuer’s covered bond guarantee
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