January 11, 2008
BSP CIRCULAR NO. 595-08
SUBJECT : Interim Tier 1 Capital for Banks Under Rehabilitation
The Monetary Board in its Resolution No. 1462 dated 21 December 2007 approved the following guidelines on the issuance of capital notes that will qualify as interim Tier 1 capital for banks under rehabilitation:
SECTION 1. Banks under rehabilitation shall be allowed, upon prior BSP approval, to issue capital notes that shall qualify as interim Tier 1 capital: Provided, That the Philippine Deposit Insurance Corporation (PDIC) shall be the holder of the said capital notes: Provided, further, That any transfer from PDIC of said capital notes shall require prior BSP approval.
SECTION 2. The interim Tier 1 capital notes shall have the following minimum features:
(1) It must be perpetual, unsecured and subordinated; cDAISC
(2) It must be issued and fully paid-up. Only the net proceeds received from the issuance shall be included as Tier 1 capital. The proceeds of the issuance must be immediately available without limitation to the bank;
(3) It must neither be secured nor covered by a guarantee of the issuer...
