On 26 February 2021, the Working Group on Sterling Risk-Free Reference Rates published the following:

  • Best practice guide for GBP loans. The Working Group has set a number of target milestones in relation to GBP LIBOR referencing loans ahead of the expected cessation of publication of GBP LIBOR after end 2021. A key recommendation is that, from the end of March 2021, GBP LIBOR is no longer used in any new lending or other cash products that mature after the end of 2021. SONIA remains the Working Group’s recommended alternative to GBP LIBOR, implemented via a compounded in arrears methodology, and loan markets should now move consistently towards this. There have been a number of Working Group publications covering the recommended set of conventions, guidance and timelines to support new loans referencing SONIA and the transition of legacy GBP LIBOR loans to SONIA. The best practice guide aims to consolidate these previous publications into a single source and assist market participants on the identified consensus industry standards when initiating new SONIA loans, transitioning legacy loans or re-financing away from GBP LIBOR, in their efforts to meet the Working Group’s key target milestones for cessation of new and transitioning of legacy loans within 2021. The guide is expected to be particularly helpful for syndicated loans.
  • GBP loan market Q&As for the Working Group’s end-Q1 2021 recommended milestone. The Loan Enablers Task Force, a sub-group under the Working Group has drafted these Q&As to address some of the questions that market participants may have in relation to the milestone. Such questions include should GBP LIBOR-linked transactions under discussion with borrowers prior to end-Q1 2021 complete post-Q1 2021?