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.
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.
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.
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.
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.
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.