Refinitiv to launch Term SONIA benchmark supporting resettlement of LIBOR

Following a positive reception from potential users Refinitiv is set to go live with Term SONIA benchmark supporting LIBOR migration.

Financial markets data and infrastructure provider Refinitiv will go live with a Term SONIA benchmark following a prototype run in July 2020.

The new product will launch on 11 January and will support resettlement of GBP London InterBank Offered Rate (LIBOR).

Jacob Rank-Broadley, head of LIBOR transition, benchmarks and indices at Refinitiv said, “From this date licensed clients will be able to use the benchmark as a reference rate in financial instruments and financial contracts, and for valuation and pricing activities.”

The industry is expecting LIBOR to come to an end in the near future after an announcement from the Financial Conduct Authority (FCA).

Refinitiv will help market participants including lenders and borrowers with their migration away from GBP LIBOR by creating a forward-looking term risk-free rate available in one, three, six and 12-month tenors which will be published daily at 11:50 London time.

The firm said its bid and offer data comes from TP ICAP’s i-Swap and Tradition’s Trad-X electronic platforms with its secondary data source coming from Tradeweb’s institutional electronic swaps platform.

Sang Lee, managing partner at Aite Group, said: “As the financial industry approaches the unknown challenges and opportunities of 2021, launching a Term SONIA Reference Rate on January 11 serves as an essential and credible tool to facilitate transition away from LIBOR.  More than ever the industry will require a robust and transparent rate that is administered by an experienced provider and subject to the highest regulatory standards, so markets can continue to function and grow even during periods of great uncertainty and stress.” 

Since July the prototype rate has been viewed over 20,000 times by over 600 users on Refinitiv Eikon and 200 users have accessed the rate via the dedicated website.