SONIA
Business & Finance abbreviation · Bond & Fixed-Income
| Stands for | Sterling Overnight Index Average |
|---|---|
| Categories | Business & Finance |
SONIA stands for Sterling Overnight Index Average, a bond & Fixed-Income abbreviation.
Benchmark interest rate for sterling, measuring the average rate banks pay to borrow sterling overnight unsecured from other financial institutions, administered by the Bank of England. It replaced sterling LIBOR at the end of 2021.
Example: The floating-rate note pays compounded SONIA plus 50 basis points.
Usage notes
SONIA was first published in 1997 and reformed in 2018 to draw on a broader set of transactions. Unlike SOFR, it is an unsecured rate. UK mortgages, loans and swaps now reference SONIA or Bank Rate. Pronounced like the name Sonia.
Related abbreviations
More bond & Fixed-Income abbreviations
- MTN – Medium-term note
- NRSRO – Nationally recognized statistical rating organization
- OAS – Option-adjusted spread
- OAT – Obligation assimilable du Trésor (French Treasury bond)
- OIS – Overnight index swap
- SOFR – Secured Overnight Financing Rate
- STRIPS – Separate Trading of Registered Interest and Principal of Securities
- T-bill – Treasury bill
- T-bond – Treasury bond
- T-note – Treasury note
- TIPS – Treasury Inflation-Protected Securities
- TRS – Total return swap