IBA rolls out Sonia indexes for lending markets

Alternative to BoE index includes 0% floors and support for both lag and shift conventions

Ice London city rates
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Ice Benchmark Administration (IBA) has begun publishing a series of Sonia indexes aimed at loan issuers seeking an alternative to an official version launched by the Bank of England in August.

The indexes are designed to simplify the calculation of compounded-in-arrears rates and should be available for use in loan contracts from April 1, when sterling Libor lending is due to cease. 

The market had been expected to coalesce around the BoE’s index, but conventions for calculating interest

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