ISDA® Amendment Allows Replacement of Discontinued Rates in Financial Contracts | Practical Law

ISDA® Amendment Allows Replacement of Discontinued Rates in Financial Contracts | Practical Law

ISDA has published a template amendment agreement to enable parties to replace any discontinued interest rates that are currently referenced in their financial contracts.

ISDA® Amendment Allows Replacement of Discontinued Rates in Financial Contracts

Practical Law Legal Update 8-584-1525 (Approx. 3 pages)

ISDA® Amendment Allows Replacement of Discontinued Rates in Financial Contracts

by Practical Law Finance
Published on 09 Oct 2014 • International
ISDA has published a template amendment agreement to enable parties to replace any discontinued interest rates that are currently referenced in their financial contracts.
On October 8, 2014, ISDA® published a Bilateral Amendment Agreement for Certain Rate Swap and Other Transaction that can be used to address the discontinuation of certain interest rate fixes.
Parties wishing to change a discontinued interest rate that is referenced in their derivatives contracts or other financial agreements can use the amendment to specify a new interest rate. The amendment is also effective to bypass a contract's fallback mechanism which would otherwise have been triggered by the inability to reset the applicable interest rate.
The amendment may be used to amend a broad range of contracts that require periodic fixing of a discontinued interest rate, including:
  • A variety of over-the-counter derivative transactions (such as swaps, options, forward rates, caps, collars and credit protection agreements).
  • ISDA's New York law or English law governed credit support documents.
  • Other financial instruments, such as debt securities and repurchase transactions.
The agreement is available for free download from ISDA's website.
For information on the discontinuation of certain LIBOR rates, see Practice note, LIBOR review and reform: overview for finance lawyers: BBA timetable for discontinuation. See also, Practice Note, Hot topics: Benchmark reform: EU and international regulatory initiatives.
"ISDA" is a registered trademark of the International Swaps and Derivatives Association, Inc. (ISDA). ISDA is not a sponsor of Practical Law and had no part in the development of this resource.