Canadian Overnight Repo Rate Average (CORRA)
The Canadian Overnight Repo Rate Average, or CORRA, measures the cost of overnight general collateral funding in Canadian dollars, using Government of Canada treasury bills and bonds as collateral for repurchase transactions. The Bank of Canada calculates and publishes it.
A buyer may meet CORRA in the pricing clause of a floating-rate loan; the Bank of Canada says the Daily Compounded CORRA rate can be used to calculate interest for a loan that references CORRA. A note on the Bank of Canada’s site from the Canadian Alternative Reference Rate working group recommends CORRA loan agreement definitions, covering both Term CORRA and Daily Compounded CORRA. It says bankers’ acceptances will no longer be available after CDOR ceases to be published on June 28, 2024. A loan written or renewed now may therefore name CORRA where an older agreement named CDOR. See getting a loan to buy a business.
What to ask the lender
- Which CORRA-based rate the loan uses, Term CORRA or a compounded daily version, and what the lender adds to it.
- What the agreement says happens if the named rate stops being published. The working group’s note includes a benchmark replacement mechanism for that case.
- How a floating CORRA-based rate differs from one set off the prime rate.
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Bank of CanadaGovernmentCanadian Overnight Repo Rate Average
- 02Bank of CanadaGovernmentMethodology for calculating the Canadian Overnight Repo Rate Average (CORRA)
- 03Bank of Canada (note of the Canadian Alternative Reference Rate working group)GovernmentRecommended CORRA loan agreement definitions and loan mechanics
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