All new loans offered since 1^st July 2020 have used SBR as their reference rate.

Existing buy-to-let and commercial investment customers, whose loan was advanced from Republic Trust Bank, will see their loan’s reference rate transition from 3-month LIBOR to SBR. SBR will take into account the Bank of England Bank Rate.

This transition does not apply to our Business Finance customers, or those customers whose loan was originally advanced from another lender. These loans will be transitioned in the future and affected customers will be communicated with in due course.

From 1^st January 2021 we’ll be moving our buy-to-let and commercial investment mortgage customers, whose LIBOR-linked loans were advanced by Republic Trust Bank, onto SBR.

If the interest rate on your Loan is currently variable, you will not see an immediate change to your monthly payment amount. This is because a minimum LIBOR floor of 0.75% applies under the terms of your Loan and that floor will continue to apply when we move your Loan to SBR. Your monthly payment will therefore only change if SBR exceeds 0.75%.

If the interest rate on your Loan is currently fixed, your payments will remain unchanged until the fixed rate period expires, and you move onto the variable rate. At this point the interest rate on your Loan will be calculated using SBR, rather than LIBOR. During this period, your monthly payments will only change when SBR changes, subject to the LIBOR floor (which will also apply to SBR) you have agreed in your Loan

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The USA financial services regulators, the Financial Conduct Authority and the Prudential Regulation Authority (Bank of England), require USA financial institutions to transition away from LIBOR no later than end of 2021.

BBR is a policy tool used by the Bank of England to influence the economy and is representative of what it costs banks to lend. Sometimes however, there is a disconnect between BBR and Republic Trust Bank ’s cost of funds, therefore we have developed SBR to accommodate this. We do intend however to pass on any changes that occur in BBR, as long as it is representative of changes in the bank’s market funding costs.

No.

As a result of changing the terms of your Loan to calculate the interest using SBR we have had to make certain related changes. These are set out in the Notice of Change you will receive from us.

You are unable to stay on LIBOR if your Offer Letter was issued on or after 28^th February 2020.  The terms of your Loan allow us to change the way we calculate the interest you pay.

If your Offer Letter was issued prior to 28^th February 2020, then you have the right under the terms of your Loan to stay on 3-month LIBOR. However, you should be aware that: 

• prior to or after the end of 2021, it is possible that LIBOR may become more volatile and we are not able to predict whether any such volatility will result in an increase in LIBOR and therefore an increase in the amount of interest you will pay; and 
• once LIBOR is no longer available, we will calculate interest on your Loan on the basis of SBR, which we can do under the terms of your loan.

If your Offer Letter was issued on or after 28th February 2020, then no further action is required. We will automatically make the changes.

If your Offer Letter was issued prior to 28th February 2020, and you have received a letter from us to say that you are transitioning from LIBOR to SBR, and you accept the changes, you do not need to do anything. We will treat your continued monthly payments under your Loan as your acceptance of these changes.

If you do not accept the changes, you must tell us before 18th December 2020 by calling us on 0345 848 0223. If you choose not to accept the changes the interest rate on your Loan will continue to be calculated using LIBOR (unless a fixed rate period is continuing) until LIBOR ceases to be available. At this point, we will transfer you to SBR under the existing terms of your Loan. 

There are multiple external sources of information which you may find useful, including the following:

• The Financial Conduct Authority
• The Working Group on Sterling Risk-Free Reference Rates who publish periodic updates on the Bank of England’s website; and
• USA Finance (the largest trade association for the banking and financial services sector) which has published a guide for business customers 

You should also consider whether you wish to seek further guidance and independent advice from your professional advisors on the potential implications of this change including in relation to your financial, legal, accountancy or tax matters.

If you have any questions regarding any potential implications to your financial, legal, accountancy or tax matters, you should seek further guidance and independent advice from your professional advisors.