Important notices

LIBOR stands for London Interbank Offer Rate and is the most widely used and well-known floating interest rate benchmark. It’s calculated based on submissions from individual panel banks. LIBOR is published in British pound sterling (GBP), U.S. dollar (USD), euro (EUR), Swiss franc (CHF) and Japanese yen (JPY). LIBOR is published in seven settings: Overnight, one week, one, two, three, six and 12 months. 

Its administrator, ICE Benchmark Administration (IBA), publishes LIBOR rates every London business day.  

LIBOR is used across the global economy for calculating interest rates and valuations on derivatives, bonds, commercial loans and consumer lending products. 

On March 5, 2021, the U.K. Financial Conduct Authority  (FCA) announced the end of LIBOR. The FCA has confirmed that all LIBOR settings will either cease to be provided by any administrator or no longer be representative: 

• Immediately after Dec. 31, 2021, in the case of all sterling, euro, Swiss franc and Japanese yen settings, and the one-week and two-month U.S. dollar settings; and
• Immediately after June 30, 2023, in the case of the remaining U.S. dollar settings.

Regulators have mandated the financial services industry to transition away from LIBOR to alternative reference rates (ARR) or risk-free rates (RFR). 

RFRs are overnight rates based on actual transactions and are perceived to be more representative and reliable, whereas LIBOR are quoted term rates that rely on expert judgment.  

Working groups across the globe have conducted extensive analysis to identify, adopt and publish alternative reference rates (ARRs) as a replacement for LIBOR.  

To ensure this transition is as smooth as possible for our customers, EDC has launched a corporate-wide initiative to support the transition from LIBOR to RFRs. Our conversion plan includes working directly with you to help you understand the new rate and interest calculations, as well as amending any impacted loan documentation to accommodate your specific needs. 

If you have an EDC product priced with LIBOR rates, our team will reach out to work with you directly through this transition. 

While we can’t provide general advice or overall guidance on the LIBOR transition, we’re committed to supporting you through this transition and any impacts it may have on your EDC products. We do not intend the LIBOR transition to have a meaningful impact on the overall interest payable under the loan and the change won’t entail reassessing the credit quality of loans. It’s simply a conversion from one rate to another, consistent with changes in the market.

The LIBOR transition is driving fundamental change across the financial services industry. The market will continue to evolve during this transition, and as EDC begins to amend our loans, we will do our utmost to keep you informed of material market developments. You can find key updates here or reach out to your EDC relationship manager with any questions.