The International Swaps and Derivatives Association today published a consultation paper outlining plans to amend its standard documentation to implement fallbacks for certain key interbank offered rates in the event that an IBOR is permanently discontinued. In that case, alternative risk-free rates that have been previously identified as part of a global benchmark effort would be used as fallbacks. The ISDA is seeking input on how to address certain technical issues associated with the adjustments that will apply to risk-free rates in the event of permanent discontinuations of relevant IBORs. Such adjustments are necessary due to the differences between the IBORs and the risk-free rates.
While the consultation paper covers non-U.S. dollar Libor, it seeks preliminary feedback on technical issues associated with fallbacks for U.S.-dollar Libor. ISDA will accept comments until Oct. 12, and plans to publish its final approach for review and comment before implementing any changes to its standard documentation.