IBOR Transition Disclosure

IBOR Transition Disclosure

Interbank offered rate transition disclosures

Around the world, regulators, financial institutions and service providers are working to improve the transparency and reliability of interest rates. RBC is participating in changes to interest rates used for credit facilities, derivatives, and other financial products in multiple jurisdictions and varying currencies. Those developments will result in changes to interbank offered rates set by financial institutions and implementation of new rates announced by regulators.

LIBOR Transition Disclosure

London interbank offered rate transition

This information is meant to update you about the transition of a key global benchmark interest rates and the possible impacts on products you may hold with RBC.

LIBOR (London Interbank Offered Rate) is a widely referenced benchmark interest rate used globally for loans, bonds, derivatives and other floating rate instruments. LIBOR's administrator, ICE Benchmark Administration Limited (IBA) has started consultations with the intention to cease the publication of the one week and two month US dollar LIBOR settings immediately following the LIBOR publication on December 31, 2021, and the remaining US dollar LIBOR settings immediately following the LIBOR publication on June 30, 2023. LIBOR's regulator, the United Kingdom's Financial Conduct Authority (FCA), has issued a statement welcoming these developments.

What rate will replace LIBOR?

Currently, the replacement rate is still unknown, but it appears the US dollar LIBOR will most likely be replaced by a rate referencing the Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. Loans or products in currencies other than US dollars will be replaced by different rates.

How will my RBC products be affected?

The impact of a new interest rate will differ depending on the product or service that you have. As the migration progresses away from LIBOR, RBC will continue to monitor the situation and provide you with updates on how your products may be affected by these developments.

What is RBC doing about this transition?

RBC is actively monitoring the reform process and approach taken by international regulators and industry working groups to fully transition from LIBOR to a replacement rate.

What do I have to do?

There is no action required on your part at this stage, and no changes will be made to any of your LIBOR linked products without us notifying you further.

How will you notify me about changes to my products?

Once we have more information about how this transition will affect your RBC products or services, we will notify you via your preferred communication channel.

CDOR (Canadian Dollar Offered Rate) / BA (Bankers Acceptance) Transition Disclosure

Cessation of the 6-month and 12-month CDOR/BA tenors

CDOR (Canadian Dollar Offered Rate) is the recognized financial benchmark in Canada for bankers’ acceptances (BAs) with a term of maturity of 1 year or less. In other words, it is the rate at which banks are willing to offer credit to companies utilizing BAs. In Canada, RBC® uses BAs as short-term, fixed rate vehicles for qualifying clients.

CDOR is administered by Refinitiv Benchmark Services (UK) Limited (“RBSL”), which is responsible for collecting input data and publishing the CDOR benchmark. Based on the recommendation from the independent CDOR Oversight Committee led by the Office of the Superintendent of Financial Institutions, RBSL has announced that the calculation and publication of the 6-month and 12-month CDOR tenors will cease effective May 14, 2021.

What will replace the 6- and 12-month BA or CDOR tenors?

RBC will not be offering 6 or 12-month BA or CDOR tenures after May 14, 2021. Clients will be offered only 1-month, 2-month and 3-month tenors after that date.

How does this affect BAs that extend beyond the effective date of May 14, 2021?

Existing BAs will not be affected, but for any that extend after May 14, 2021, only 1-month, 2-month and 3-month BA tenors will be offered at their maturity.

Is there any impact to the 1-month, 2-month and 3-month BA tenors?

These tenors will not be affected by this announcement.