Unsecured Subordinated Debt Facility

Rationale

Aims to improve the risk-based capital adequacy ratio (RBCAR) of participating CFIs via LBP subscription to their Lower Tier 2 notes issuance.

Eligible Issuer

Rural Banks

Cooperative Banks

Thrift Banks

Basic Policies

Maximum Amount of Subscription

Up to 50% of CFI’s Tier 1 Capital, qualifying as Tier 2 capital.

Form

The Notes will be evidenced by Certificate of Indebtedness.

Term

  • Five (5) years with no call option; or
  • Ten (10) years, with call option at the end of five (5)  years from issue date.

Call Option

For the UnSD having a 10-year tenor, the Issuer may exercise a call option on the 5th year from issue date, provided that the coupon rate remains the same as that of the date of its availment, subject to BSP approval.

Coupon Rate

Prevailing LBP rate at the time of subscription.