EBA cracks down on capital call removal

By Will Caiger-Smith
31 Jan 2014

The European Banking Authority has confirmed that the removal of call options from legacy capital instruments will count as a new issue and that such bonds will only continue to be grandfathered during the transition into CRD 4 if they have five years or more remaining to maturity.

UBI Banca recently removed the call options from its 2019 and 2020 retail tier two bonds — a manoeuvre bankers said no issuer would get away with after Intesa Sanpaolo was lambasted for it in late 2012.

The bonds involved in both those exercises will not be affected ...

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