When the ARRC was reconstituted in 2018, a broader range of market participants were added as members of the ARRC and its working groups. Since then, the ARRC has been working to deliver recommendations for addressing risks in cash product contract language in the event LIBOR is no longer usable. As part of those efforts, the ARRC released consultations for public feedback on fallback contract language for several cash products. These consultations outline draft language to be voluntarily incorporated in new contracts that reference USD LIBOR to ensure these contracts will continue to be effective in the event that LIBOR is no longer usable.

After full review of public feedback at the close of each comment period, the ARRC released final recommendations on fallback language to be incorporated into new USD LIBOR contracts for market participants’ voluntary use. The consultations, comments, and final recommendations, as appropriate, are broken out by cash product below.

ARRC members were also actively engaged in work led by the International Swaps and Derivatives Association (ISDA) to consider best practices for contract robustness in derivatives contracts. In early 2021, ISDA’s IBOR Fallbacks Protocol and IBOR Fallbacks Supplement took effect. Together, they focus on strengthening existing and new derivatives contracts with durable fallback language.

ARRC Statement on Recommended Fallbacks for Implementation of its Hardwired Fallback Language (Released March 15, 2023)

Summary of Spread-Adjusted Fallback Recommendations (Released October 6, 2021)

Summary of ARRC's LIBOR Fallback Language (Released November 15, 2019)

Principles for Fallback Contract Language (Released July 9, 2018)

Spread Adjustment Methodologies for Fallbacks in Cash Products

• Consultation (Released for comment on January 21, 2020)
• Comments Received (Comment Period Ended on March 25, 2020)
• Supplemental Consultation (released for comment on May 6, 2020)
• Comments Received (Comment Period Ended on June 15)
• Final Recommendation

Fallback Contract Language and Consultation Materials by Product

Adjustable Rate Mortgages

• Consultation (Released for comment on July 12, 2019)
• Comments Received (Comment Period Ended on September 24, 2019)
• Final Recommended Language

Bilateral Business Loans

• Consultation (Released for comment on December 7, 2018)
  • Webcast about consultation
• Comments Received (Comment Period Ended on February 5, 2019)
• Supplemental Recommendations of Hardwired Fallback Language (March 25, 2021)
• Recommended Fallback Language (August 27, 2020)
  • FAQs for Business Loans Hardwired Fallback Language
• Archived Recommended Language (May 30, 2019)

Floating Rate Notes

• Consultation (Released for comment on September 24, 2018)
  • Webcast about consultation
• Comments Received (Comment Period Ended on November 26, 2018)
• Final Recommended Language

Securitizations

• Consultation (Released for comment on December 7, 2018)
  • Webcast about consultation
• Comments Received (Comment Period Ended on February 5, 2019)
• Final Recommended Language
• Supplemental Recommendations of Hardwired Fallback Language (August 18, 2021)

Syndicated Loans

• Consultation (Released for comment on September 24, 2018)
  • Webcast about consultation
• Comments Received (Comment Period Ended on November 26, 2018)
• Supplemental Recommendations of Hardwired Fallback Language (March 25, 2021)
• Recommended Fallback Language (June 30, 2020)
  • FAQs for Business Loans Hardwired Fallback Language
• Technical Appendices (August 27, 2020)
  • ARRC BWLG Example - Lookback without Observation Shift.xlsx
  • ARRC BWLG Examples - Other Lookback Options.xlsx (Updated on September 3, 2020)
  • ARRC BWLG Compounding Methods Examples.xlsx
  • ARRC BWLG Daily Floor Examples.xlsx
• Archived Recommended Language (April 25, 2019)

Variable Rate Private Student Loans

• Consultation (Released for comment on March 27, 2020)
• Comments Received (Comment Period Ended on June 15, 2020)
• Final Recommended Language