Subordinated debt issued by a national bank.

CFR · 2024-01-01 · US · Title 12

(a) (b) (c) (d) (1) (i) Have a minimum original maturity of at least five years; (ii) Not be a deposit and not insured by the FDIC; (iii) Be subordinated to the claims of depositors; (iv) Be unsecured, which would include prohibiting the establishment of any legally enforceable fund earmarked for payment of the subordinated debt note through: (A) A sinking fund; or (B) A compensating balance or any other funds or assets subject to a legal right of offset, as defined by applicable State law; (v) Be ineligible as collateral for a loan by the issuing national bank; (vi) Provide that once any scheduled payments of principal begin, all scheduled payments must be made at least annually and the amount repaid in each year may be no less than in the prior year; and (vii) Provide that, where applicable, no payment (including payment pursuant to an acceleration clause, redemption prior to maturity, repurchase, or exercising a call option) may be made without prior OCC approval. (2) (i) Maintains a certain minimum amount in its capital accounts or other metric, such as minimum capital assets, liquidity, or loan ratios; (ii) Unreasonably restricts a national bank's ability to raise additional capital through the issuance of additional subordinated debt or other regulatory capital instruments; (iii) Provides for default and acceleration of the subordinated debt as the result of a change in control, if such change in control results from the OCC's exercise of its statutory authority to requ

official document · source cfr-2024 · id 12:§ 5.47