EN
CESSATION OF CDOR and Bankers’ Acceptances
CDOR (Canadian Dollar Offered Rate) is the recognized financial benchmark in Canada for setting the interest rate for bankers’ acceptances (“BAs"). In Canada, RBC® offers BAs as short-term, fixed rate credit options 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 independent oversight committees and working groups, RBSL has ceased to calculate and publish the 6-month and 12-month CDOR tenors since May 14, 2021, and will cease to publish all remaining tenors of CDOR (i.e. 1-month, 2-month, and 3-month) after a final publication on June 28, 2024.
What will be the replacement?
The vast majority of CDOR based financial products (including BAs) will be migrated to the Canadian Overnight Repo Rate Average (“CORRA") administered by the Bank of Canada or the forward-looking term rate (“Term CORRA") administered and published by CanDeal Benchmark Solutions and TMX Datalinx.
CORRA, as well as Term CORRA will be made available for Canadian dollar borrowers to use as an alternative rate.
What is the transition plan?
The Canadian Alternative Reference Rate (“CARR") working group has implemented a two-stage transition plan to support the transition away from CDOR to CORRA and Term CORRA and has introduced a new milestone whereby lenders should not enter into any new loan contracts referencing CDOR or BAs after November 1, 2023.
For clarity, this November 1, 2023 milestone does not impact the ability of borrowers to draw on existing CDOR or BA financial products that have not yet matured, that have not been extended or that are not subject to material amendments prior to November 1, 2023.
All existing financial products that reference CDOR or BAs will need to transition to CORRA or Term CORRA, or another alternative rate on or before June 28, 2024.
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 with us. If you currently have loans with us which charge interest on CDOR based rates, or have outstanding BAs, your Relationship Manager will guide you through the transition to the alternative interest rate structure over the coming months.
What is RBC doing about this transition?
RBC is taking actions based on guidance from domestic regulators, as well as industry working groups as we fully transition away from CDOR based interest rates.
What do I have to do?
If you do not currently have loans with us which reference a CDOR based interest rate or availability of BAs, no action is required on your part. If you do currently have a CDOR based rate loans or BA availability, please be guided by discussions with your Relationship Manager who will have the necessary information and tools based on your specific products over the coming months.
How will you notify me about changes to my products?
Your Relationship Manager will contact you to discuss a transition plan specific to your needs and current products.
CESSATION OF CDOR and Bankers’ Acceptances
CDOR (Canadian Dollar Offered Rate) is the recognized financial benchmark in Canada for setting the interest rate for bankers’ acceptances (“BAs"). In Canada, RBC® offers BAs as short-term, fixed rate credit options 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 independent oversight committees and working groups, RBSL has ceased to calculate and publish the 6-month and 12-month CDOR tenors since May 14, 2021, and will cease to publish all remaining tenors of CDOR (i.e. 1-month, 2-month, and 3-month) after a final publication on June 28, 2024.
What will be the replacement?
The vast majority of CDOR based financial products (including BAs) will be migrated to the Canadian Overnight Repo Rate Average (“CORRA") administered by the Bank of Canada or the forward-looking term rate (“Term CORRA") administered and published by CanDeal Benchmark Solutions and TMX Datalinx.
CORRA, as well as Term CORRA will be made available for Canadian dollar borrowers to use as an alternative rate.
What is the transition plan?
The Canadian Alternative Reference Rate (“CARR") working group has implemented a two-stage transition plan to support the transition away from CDOR to CORRA and Term CORRA and has introduced a new milestone whereby lenders should not enter into any new loan contracts referencing CDOR or BAs after November 1, 2023.
For clarity, this November 1, 2023 milestone does not impact the ability of borrowers to draw on existing CDOR or BA financial products that have not yet matured, that have not been extended or that are not subject to material amendments prior to November 1, 2023.
All existing financial products that reference CDOR or BAs will need to transition to CORRA or Term CORRA, or another alternative rate on or before June 28, 2024.
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 with us. If you currently have loans with us which charge interest on CDOR based rates, or have outstanding BAs, your Relationship Manager will guide you through the transition to the alternative interest rate structure over the coming months.
What is RBC doing about this transition?
RBC is taking actions based on guidance from domestic regulators, as well as industry working groups as we fully transition away from CDOR based interest rates.
What do I have to do?
If you do not currently have loans with us which reference a CDOR based interest rate or availability of BAs, no action is required on your part. If you do currently have a CDOR based rate loans or BA availability, please be guided by discussions with your Relationship Manager who will have the necessary information and tools based on your specific products over the coming months.
How will you notify me about changes to my products?
Your Relationship Manager will contact you to discuss a transition plan specific to your needs and current products.