(Alliance News) - HICL Infrastructure PLC on Friday said its school regeneration project is the first public-private partnership in the UK to pre-emptively amend its financing terms ahead of the cessation of the Libor interest rate benchmark on December 31.
The FTSE 250-listed trust said its lender, InfraRed Capital Partners, has agreed to transition to the Bank of England's sterling overnight index average, or Sonia, in 2022.
The Sonia rate is set at the average interest rates paid overnight by banks borrowing sterling from other financial institutions and institutional investors.
The London-based firm said InfraRed sponsors its pilot scheme, which includes the Sheffield Building Schools for the Future project in question.
HICL said the new lending agreement reduces the risks associated with the end of Libor, a benchmark interest rate at which major global banks lend to one another.
The replacement agreement will become active when the benchmark rate ceases at the end of 2021.
"The intention is that this will be used as a template to provide a smooth transition for other UK [public-private partnership] projects, including those in the HICL portfolio, during the remainder of the calendar year," the company added.
The trust noted, that the agreement is still subject to the approval of its public sector client, Sheffield City Council.
Shares in HICL Infrastructure were trading up 0.5% at 168.46 pence each in London on Friday morning.
By Scarlett Butler; scarlettbutler@alliancenews.com
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HICL Infrastructure (HICL)