In line with global interest rate benchmark reforms, SIBOR will cease after 31 December 2024 and the Singapore Overnight Rate Average (SORA) will replace SIBOR as the key interest rate benchmark for Singapore Dollar interest rate contracts. We will be supporting customers with SIBOR-based loans to transition to an alternative loan package by 30 April 2024. Find out more about how we can assist you in switching out of your SIBOR-based loan.
Auto-conversion to SORA Conversion Package by June 2024
If your SIBOR-based loan is not converted by 30 April 2024, it will be automatically switched to the SORA Conversion Package (SCP) starting June 2024.
Act early to switch out of your SIBOR-based package
Choose an alternative reference rate for your loan. You could switch to the SCP or any of our prevailing packages.
About SORA
SORA is a robust and transparent benchmark anchored on actual market transactions and underpinned by a deep and liquid overnight interbank funding market. It is determined based on the volume-weighted average rate of borrowing transactions in the unsecured overnight interbank Singapore dollar cash market in Singapore between 8.00am and 6.15pm. The daily SORA rate is published on the Monetary Authority of Singapore (MAS)‘s website.
SORA Conversion Package
You may choose to take up the SORA Conversion Package (SCP) during the active transition phase from 1 September 2023 to 30 April 2024. Customers who have not moved out of their SIBOR-based loan by 30 April 2024 will be automatically switched to the SCP in June 2024.
The switch to the SCP is at no additional fee or lock-in period.
Interest rate under the SCP comprises three components:
- Existing SIBOR loan margin which remains unchanged;
- 3-month Compounded SORA, a floating interest rate benchmark published by MAS; and
- Adjustment Spread, added to account for the difference between SIBOR and 3-month Compounded SORA. Depending on the timing of transition, it is computed:
- Using Spot-Spread under Active Transition Phase (1 September 2023 to 30 April 2024) - spread is computed as the average difference between the applicable SIBOR and 3-month Compounded SORA in the preceding three months, floored at zero. The relevant Adjustment Spreads are published on The Association of Banks in Singapore (ABS)’s website on the first business day of each month.
- Using 5-Year Historical Median Spread under Automatic Conversion Phase (June 2024) - spread is computed as the historical median between the applicable SIBOR and 3-month Compounded SORA over the period of 30 June 2018 to 30 June 2023.
