Sonia gets makeover as EBRD shifts new structure

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By Burhan Khadbai
20 Feb 2020

The European Bank for Reconstruction and Development this week became the first borrower to deviate from the standardised coupon calculation method for Sonia-linked floating rates. While investors backed the new structure, with the deal receiving a huge order book from a large number of accounts, there are some market participants who believe the disruption was unnecessary, writes Burhan Khadbai.

The EBRD’s decision to roll out a new coupon structure for its Sonia FRN stemmed from last April, when it approached the first coupon payment for its debut Sonia trade. Like every other deal in the format which came before it, the trade was issued with a daily ...

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