Oversea-Chinese Banking Corporation Limited (OCBC Bank) acquired consent from bondholders yesterday to modify the benchmark underpinning its £250m floating charge lined bonds due 2023 from GBP LIBOR to SONIA (together with consequential amendments to the underlying lined bond swaps). This consent is the primary of its type for the Asia market as organisations begin transitioning to new risk-free charge benchmarks.
On 5 March 2021, the United Kingdom Financial Conduct Authority introduced the longer term cessation or lack of representatives of the 35 LIBOR benchmark settings at the moment printed by ICE Benchmark Administration, the administrator of LIBOR. Work is subsequently underway to transition away from LIBOR and in the direction of risk-free charge benchmarks throughout monetary markets globally. In the United Kingdom, SONIA has been chosen as the popular different risk-free charge benchmark for GBP LIBOR.
Jonathan Horan, companion at Linklaters, who suggested OCBC Bank, mentioned:
“This is an important transaction as we start to see borrowers in Asia adopt their transition away from LIBOR. It’s not a straightforward process and the industry has been working hard to find solutions acceptable to market participants.”
The Linklaters group advising OCBC Bank was led by capital markets companion Jonathan Horan and counsel Grace Wee, with assist from managing associates Samuel Lee and Cherrylene Lee. Capital markets companion Victor Wan suggested OCBC Bank on the underlying lined bond swaps.
Barclays Bank PLC, Singapore Branch acted as solicitation agent to OCBC Bank.