Compounded SONIA is a backward-looking benchmark interest rate calculated by compounding the daily Sterling Overnight Index Average fixings over the actual accrual period. The rate and the exact interest amount are known only at the end of the period. While the US financial markets prefer forward-looking Term SOFR, UK and sterling markets prefer SONIA compounded in arrears pursuant to LMA recommendations. LoanStreet CLS calculates compounded SONIA in arrears for sterling loans as part of its global loan servicing software.