The Emirates Interbank Offered Rate (EIBOR), which is regulated by the Central of United Arab Emirates (UAE), is the benchmark interest rate, stated in UAE Dirhams, for lending between banks within the UAE market. At this stage we are not aware of any specific timeline to make changes to EIBOR. We will use our best endeavors to keep ADCB Customers informed of any further developments on EIBOR.

If a benchmark rate such LIBOR is discontinued (or otherwise become unavailable) or cease to be representative or appropriate for use in a transaction between you and ADCB, that affected benchmark may be replaced with an alternative benchmark using fallback arrangements (if any) set out in the governing terms of the contract for that affected transaction.

Those fallback arrangements may include a change to the amounts payable under the terms of the affected transaction as well as changes to its value. Additionally, an adjustment spread may be applied to the alternative rate, for example to produce an industry-accepted replacement rate for the original benchmark.

The alternative rate may differ from an IBOR in a number of material respects, including (without limitation) by being backwards-looking in most cases, calculated on a compounded or weighted average basis, so-called "risk-free" overnight rates, whereas IBORs are generally expressed on the basis of a forward-looking term and include a risk-element based on interbank lending. As such, an IBOR and any alternative rate may behave materially differently as a reference rate for a financial contract or financial instrument.

The terms of the fallback arrangements may require the exercise of discretion by ADCB as calculation agent or its designee, as the case may be, and the making of potentially subjective judgments and/or the amendment of the terms of the affected transaction to make other technical, administrative or operational changes or adjustments in order to reflect the adoption and implementation of an alternative rate. The interests of ADCB or its designee, as the case may be, in making such determinations or amendments may be adverse to your interest and may not consider any or all of the factors which you might consider to be relevant for your interests.

These reforms may result in, without limitation: 

• (i) changes to the methodology or other terms of the IBOR which could (amongst other things) have the effect of reducing or increasing the rate or level, or affecting the volatility of the published rate or level, of the benchmark relevant in transactions between you and ADCB; 
• (ii) restrict or discourage market participants from continuing to administer, contribute to or using such benchmark; 
• and/or (iii) disappearance of the benchmark.

The operation of the alternative rate and any adjustment spread may result in a financial contract or financial instrument performing differently than it would have done if the original benchmark rate had continued to apply (including, without limitation, paying a higher or lower rate of interest, differences with respect to any related tax or hedge accounting issues or resulting mismatches with other transactions that you may have entered into).

Clients of ADCB that have entered into (or may in the future enter into) financial contracts or have purchased (or may in the future purchase) financial instruments, products or services that include a reference rate (e.g. LIBOR) or index should conduct independent investigation and analysis regarding the risks involved.

You should consider, and keep under review (on your own behalf or through independent professional advice), the potential impact and risks of any future changes to the relevant benchmark rates under the financial contracts and financial instruments that you have (or may in the future enter into) with ADCB. We recommend that you keep up to date with the latest industry developments in relation to the upcoming changes and the potential alternative benchmark rates that may be relevant to you.