CARR Releases Recommended Fallback Language for CDOR-Based Lending


The Canadian Alternative Reference Rates (CARR) Task Force today released recommended fallback wording for new and existing loan agreements where the reference interest rate is the Canadian Dollar Offered Rate (CDOR) . This language was developed by a CARR sub-group composed of subject matter experts.

The London Interbank Offered Rate (LIBOR) halt highlighted the significant economic, legal, operational and other difficulties that can arise when a major benchmark is halted, particularly for contracts with inadequate fallback language. or non-existent (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 borrowers and lenders, to address some of these issues for loan agreements that reference CDOR. CARR previously published recommended fallback language for floating rate notes referencing CDOR or the Canadian Overnight Repo Rate Average (CORRA).

The CARR Co-Chairs issued the following statement regarding the announcement:

“The LIBOR transition has underscored the importance of having clear fallbacks for financial benchmarks. CARR has drafted this recommended language to provide market participants with a convention they can use in With the termination of CDOR scheduled for June 28, 2024, borrowers and lenders are advised to include robust recourse to CORRA in their documentation as soon as possible.

About CARR

Canada created CARR, a task force sponsored by the Canadian Fixed Income Forum, to coordinate reform of Canadian benchmark interest rates. CARR’s mission is to ensure that Canada’s benchmark interest rate regime is robust, resilient and effective in the years to come. During the upcoming transition period, CARR will support the transition from CDOR to CORRA as a key financial benchmark, including working towards the eventual creation of an IOSCO-compliant forward CORRA rate.

Visit the CARR webpage for up-to-date transition information, including all key CARR documents, and to sign up to receive email updates from CARR.

Market demands

Financial Markets Department
Bank of Canada

CARR Co-Chair
General Manager and Vice President
CIBC Capital Markets

Media inquiries

Media Relations
Bank of Canada


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