Linklaters advises OCBC Bank on Asia’s first public GBP LIBOR to SONIA consent solicitation

Oversea-Chinese Banking Corporation Limited (OCBC Bank) received consent from bondholders yesterday to switch the benchmark underpinning its £250m floating rate covered bonds due 2023 from GBP LIBOR to SONIA (including consequential amendments to the underlying covered bond swaps). This consent is the first of its kind for the Asia market as organisations start transitioning to new risk-free rate benchmarks.

On 5 March 2021, the United Kingdom Financial Conduct Authority announced the future cessation or loss of representatives of the 35 LIBOR benchmark settings currently published by ICE Benchmark Administration, the administrator of LIBOR. Work is therefore underway to transition away from LIBOR and towards risk-free rate benchmarks across financial markets globally. In the United Kingdom, SONIA has been chosen as the preferred alternative risk-free rate benchmark for GBP LIBOR.

Jonathan Horan, partner at Linklaters, who advised OCBC Bank, said:

“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 team advising OCBC Bank was led by capital markets partner Jonathan Horan and counsel Grace Wee, with support from managing associates Samuel Lee and Cherrylene Lee. Capital markets partner Victor Wan advised OCBC Bank on the underlying covered bond swaps.

Barclays Bank PLC, Singapore Branch acted as solicitation agent to OCBC Bank.