Santander, Lloyds eye Isda fallbacks for AT1 Sonia switches

Lloyds follows Santander with last-minute revision to subordinated bond reset clauses

Lloyds-and-Santander-in-bond-switch montage

Two UK lenders are using the swaps fallback methodology published by the International Swaps and Derivatives Association to help eradicate residual traces of dying Libor rates in legacy subordinated debt issues – one by design, the other after an eleventh-hour rethink.

Santander UK is seeking bondholder consent to re-hitch Libor-linked reset clauses to Sonia for £1.25 billion ($1.63 billion) of Additional Tier One (AT1) securities. Reset clauses kick in if a bond is not called by a certain date

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