Information to be provided to the Reference Rate Enforcement Act (RW-VG)

The reference rate changes will be taken into account in your ongoing interest rate adjustments.

Further information on the emergency plan in accordance with the Reference Rate Enforcement Act (RW-VG)

The event that the reference rate is no longer published cannot be sufficiently clearly regulated in contracts with consumers. This is because the consequences cannot be predicted with sufficient precision in advance. Should the legislator - as has happened in comparable cases in the past - prescribe a substitute reference rate, then this will be used. If there is no statutory regulation, in our legal opinion the reference rate that is most suitable for the adjustment of the interest rates in the sense of the agreements made in the loan contract, taking into account all circumstances, will have to be used as a substitute. We would of course inform you in detail about this if necessary. 

Modification or discontinuation of a reference rate

Since 1/1/2018, the EU Benchmark Regulation (Regulation (EU) 2016/1011 has been in force. The objective of the Benchmark Regulation is to ensure that benchmarks provided and used in the EU are robust, reliable and representative in order to ensure the proper functioning of the internal market and to ensure a high level of consumer and investor protection.

Among other things, the Benchmark Regulation requires banks to establish robust written plans describing how the bank will proceed if a benchmark changes significantly or is no longer provided. Banks currently already have such robust fallback plans in place.

The Benchmark Regulation was last amended by Regulation (EU) 2021/168, effective as of 13.2.2021 (see the consolidated version here): the European Commission was given the right to replace critical benchmarks by means of Union law in specific cases, in particular in the event that they cease to be published.

As your lending bank, we would like to ensure that, in case of the discontinuation of the reference rate, a substitute reference rate is used which is economically closest to the discontinued reference rate. Which substitute reference rate this will be in the future cannot be contractually regulated in a meaningful way at present because the economic and other consequences of a replacement event cannot be predicted with sufficient precision in advance. 

Replacement events

A replacement event occurs if:

• the administrator of the reference rate or the supervisory authority responsible for the administrator of the reference rate or a person acting on their behalf has publicly announced that the provision of the reference rate will be permanently or indefinitely terminated;
• the reference rate is permanently discontinued without prior notice by the administrator;
• the supervisory authority responsible for the administrator of the reference rate or an institution vested with powers relating to the insolvency or liquidation of the administrator has publicly announced that, in its view, the reference rate is no longer representative (of the underlying market or economic reality) and the representativeness of the reference rate will not be restored either;
• the use of the reference rate has become unlawful for the lending bank or the customer for any reason, or if the lending bank or the customer is otherwise prohibited from using the reference rate;
• the administrator of the reference rate has its authorization withdrawn or suspended; or
• the administrator of the reference rate is insolvent or insolvency proceedings are opened against its assets.

If one or more replacement events occur, the following procedure is envisaged: 

1. If a substitute reference rate is specified at the European level on the basis of the benchmark regulation or otherwise at the national level (as is to be expected for frequently-used reference rates and as has already happened in the past, see for example “COMMISSION IMPLEMENTING REGULATION (EU) 2021/1847 of 14 October 2021 on the designation of a statutory replacement for certain settings of CHF-LIBOR", then the substitute reference rate will be used from the point in time specified in the relevant legal act.
2. If no substitute reference rate is set by the Austrian or EU legislature, the substitute reference rate determined by the Administrator publishing the reference rate shall be used as a substitute reference rate.
3. If the Administrator does not determine a substitute reference rate, then the substitute reference rate determined by the Austrian Financial Market Authority, the European Central Bank or the European Securities and Markets Authority, if one of these supervisory authorities is entitled to do so, shall be used.
4. If the supervisory authorities referred to in paragraph (3) above do not determine a substitute reference rate, then, in our legal opinion, which is subject to review by the courts, the reference rate which -- taking into account all circumstances -- is most suitable for adjusting the interest rates in accordance with the terms and conditions of the loan agreement shall be used as a substitute.
5. In order to maintain the continuity of contracts and to avoid possible distortions in the contractual relationship, an "adjustment spread" (i.e., a premium or reduction) will have to be applied in the process of switching to the new substitute reference rate, if necessary. The adjustment spread is not a commercial margin, but merely serves to maintain the continuity of the agreed interest rate conditions of your loan in the event of a necessary changeover to the substitute reference rate (i.e., to bring the substitute reference rate as close as possible in line with the originally-agreed reference rate). 

Unless otherwise stipulated by law, the relevant substitute reference rate will be used from the date on which the (old) reference rate concerned is actually no longer published, undergoes a significant change or is no longer considered representative. All affected customers will be informed of the circumstance of the discontinuation of publication, the significant change or the affected reference rate becoming non-representative as well as of the resulting substitute reference rate. In case of temporary unavailability of the substitute reference rate, the last available value will be applied on the account, unless otherwise contractually agreed. 

EURIBOR

In many contracts, EURIBOR is agreed as the reference rate. A survey is currently being conducted at the European level to determine which reference rate could be a suitable replacement for EURIBOR. A working group has also been set up for this purpose, the Working Group on Euro Risk-Free Rates. The euro short-term rate (€STR) is currently proposed as a suitable replacement reference rate for EURIBOR, although certain relevant calculation methods and other relevant information are currently still being worked out by the working group.

The FMA considers the recommendations of the Working Group on Euro Risk-Free Rates (for general information, see working group on euro risk-free rates (europa.eu)) to be robust fallback plans. These have also been taken into account in our fallback plan.

According to our fallback plan, in the event of a replacement event, a special committee will be convened to manage the necessary processes. Such special committee will develop and monitor the next steps regarding internal and external communication, the determination of a substitute reference rate, and the adaptation of IT systems.