Fallback plans in connection with benchmarks

Jyske Bank A/S has prepared fallback plans for benchmarks.

Our fallback plans, which are robust and maintained on an ongoing basis, apply to credit agreements, loan agreements and derivatives transactions, etc. using reference rates, categorised as benchmarks according to the Benchmark Regulation.

The implication of fallback plans for benchmarks to our clients

If a benchmark, for instance CIBOR3, is changed materially or ceases to exist, and you have:

  • a credit or a loan agreement stipulating that the rate of interest is determined on the basis of CIBOR3 + a premium
  • entered into a derivatives transaction, for instance an interest-rate swap, where payments are determined on the basis of CIBOR3 + a premium

Jyske Bank will determine a new, corresponding reference rate or representative rate based on the fallback plans. You will be contacted and informed about the termination or change of the given benchmark as well as any consequences it may have for you.

If a benchmark changes materially or ceases to exist before an alternative has been established, Jyske Bank will establish a new and corresponding official reference rate or a representative rate. Where a market practice exists in this respect, this may form the basis of the determination, or a representative rate may be determined based on the principles on which the replacement benchmark has on an international scale generally been based.

In some cases, you will already have entered into an agreement on an alternative reference rate. If so, such an agreement will still apply to you.

A replacement benchmark may deviate from the originally agreed benchmark because it often measures another market and is therefore determined in a different way. Therefore, the originally agreed premium will most likely be adjusted so that the aggregate new interest rate/interest payment will in the best possible way correspond to the originally agreed aggregate interest rate/interest payment.

How are Jyske Bank's fallback plans determined?

The Jyske Bank Group has a Benchmark reference group following the development in benchmarks used in the Jyske Bank Group and ensures that the fallback plans are updated on an ongoing basis. The benchmark reference group is responsible for pointing to benchmarks which are expected to be used as a so-called replacement benchmark for a discontinuing or changed benchmark.