The Canadian Alternative Reference Rate working group (CARR) today published recommended fallback language for new and existing loan agreements where the interest rate benchmark is the Canadian Dollar Offered Rate (CDOR). This language has been developed by a CARR subgroup comprised of relevant subject matter experts.
The cessation of the London Interbank Offered Rate (LIBOR) has highlighted the significant economic, legal, operational and other difficulties that can arise when a major benchmark is discontinued, particularly for contracts with inadequate or no fallback language (language that describes what happens to the contract if the applicable reference rate is no longer available). CARR has developed this recommended fallback language in consultation with multiple stakeholders including both borrowers and lenders to address some of these issues for loan agreements that…
