Lloyds plans £4bn Sonia shift for covered bond extension clause

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