EONIA: Definition & Meaning | Bondfish
EONIA (Euro OverNight Index Average) was a benchmark rate that measured the average interest rate at which a panel of eurozone banks lent unsecured funds to one another overnight; it has been discontinued and replaced by the euro short-term rate (€STR).
What it means
EONIA was administered by the European Money Markets Institute and, for many years, served as the reference overnight rate for the euro area, underpinning derivatives, floating-rate instruments, and interest-rate calculations across the eurozone financial system.
As part of the global shift toward more robust, transaction-based benchmarks, the European Central Bank launched the euro short-term rate (€STR) in October 2019. EONIA was then recalculated as €STR plus a fixed spread during a transition period and was permanently discontinued on January 3, 2022, when €STR became the sole overnight benchmark for the euro area.
Why it matters for bond investors
Legacy floating-rate bonds, swaps, and other contracts that once referenced EONIA have transitioned to €STR, usually with a small spread adjustment to preserve the original economics of the contract. When reading the terms of an older euro-denominated floating-rate note, check whether the reference rate has already been amended to €STR, since EONIA itself no longer exists and cannot be used for new pricing.
Related terms
This definition is for general information only and is not investment advice. Bond investing involves risk, including possible loss of principal.