BoE’s new Sonia index gets a thumbs-up from issuers

Calculating coupons based on compounded Sonia was “a real nightmare” for some

Bank of England and Stock Exchange
Rachael King

The Bank of England’s decision to publish an official Sonia index has been hailed as an “incredibly helpful” step toward accelerating adoption of the new rate for cash products.

Corporate issuers have voiced concerns about inconsistencies in the final coupon rates calculated by different parties – such as paying agents and swap counterparties – for bonds and loans that use a compounded Sonia rate.

The BoE’s move, which was announced on February 26, solves the problem by establishing a ‘golden

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