How are discussions going with your bank about transition from LIBOR to SONIA?

Following my blog of 12th July I am getting feedback that the banks, and their borrowers, are well progressed on the largest loans that need work on transition, but that the banks are concerned about some borrowers with smaller loans, who are not fully engaging with the process, and they are having to ‘chase’ them up.

This was quite predictable. It is a relatively complex issue for a business, especially one without a full-time Finance Director when it falls upon the owners/management who may dismiss this as just a technical issue when they have other priorities (especially with all the supply chain issues around).

The banks are under strict timescales to get this ‘exercise’ complete, with a deadline not of their own making. Internal monitoring and ‘performance management’ approaches will raise the pressure to get this done by the end of the year and businesses could come under stress to make what are important financial decisions. December is never the time to be doing that.

So, just a word of encouragement to those businesses who have not yet responded or engaged properly with their lenders – please do so ASAP