However, loan markets were slower to progress and they estimated that about 10% of the sterling Libor loan market by value would require alternative rates. The 10% largely comprised low-value loans made to a wide range of smaller borrowers, who could benefit from simplicity and payment certainty. The policy rate, and in some instances a forward-looking term rate, would be preferred for them.
Otherwise, larger and more sophisticated corporates and specialist lending sectors tended to use SONIA compounded in arrears. The Working Group on Sterling Risk-Free Reference Rates identified certain barriers to the widespread adoption of the overnight SONIA compounded in arrears, which are instructive for the work programme of the MPG.