August 12, 2022
Many of our clients are party to loan agreements that reference the benchmark Canadian Dollar Offered Rate (“CDOR”) plus a spread, as the interest rate charged on the principal amount owing. Back in May of this year, financial data provider Refinitiv Benchmark Services (UK) Limited announced that CDOR, a very commonly used benchmark in Canada, would no longer be published as of June 2024. As a consequence, you may be wondering what you should do if your loan agreement cites CDOR and will mature (or be refinanced) after June 2024. The quick answer: in the short term, amend your loan agreement and other contracts to include fallback language. In the long term, amend your loan agreement to replace CDOR in its entirety with another benchmark, such as the Canadian Overnight Repo Rate Average (“CORRA”).
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