Today the German Banking Association (Bundesverband deutscher Banken – BdB) published its Supplementary Agreement for IBOR succession (Zusatzvereinbarung für IBOR-Nachfolgeregelung (IBOR-Zusatzvereinbarung)), a template agreement for the transition away from LIBOR under the German Master Agreement for Financial Derivatives Transactions (Deutscher Rahmenvertrag für Finanztermingeschäfte – DRV). The DRV is not covered by the ISDA 2020 IBOR Fallbacks Protocol. The BdB’s new template agreement does not provide for a protocol solution; rather, it provides for bilateral agreements that broadly reflect the provisions of the ISDA 2020 IBOR Fallbacks Protocol. The bilateral agreement amends the underlying DRV documentation and is governed by German law. It covers all five of the key LIBOR currencies: USD, GBP, EUR, CHF and JPY. The agreement is intended to be a suitable fallback within the meaning of the EU Benchmark Regulation. By way of further annexes and optional elections, it allows the parties to make several choices to customise the template agreement. At this time the template agreement is only available in the German language.
This new template agreement complements the previously published EONIA to €STR template agreement, which we discussed in our earlier blog post, Documenting Benchmark Transition Under the German Master Agreement for Financial Derivatives Transactions.