My Little Pony Wrapping Paper

capitalization "Near equity"

Tier1:

• Innovative capital instruments or Preference shares
  
• Duration of contract : indeterminate
• Minimum: 10 years
• Reimbursement requires authorization by the Bank of Italy
  
• Subordinated: preferred to shareholders
• capacity to absorb losses: the subscribers preference shares are called upon to cover losses per share
• Suspension interest and repayment
• Non-cumulation of interests
• If a year the coupon is suspended loses the bondholder the right
  
• But "related actions" are less risky: the 'related shareholder is entitled to the dividend cumulation
  
• accounting problems
• instruments are characterized by so high a risk profile that is incompatible with the definition of debt in the current regulatory environment, and are not compatible with the definition of actions
  
• Italian banks placed the issues of preference shares (Bonds) through a foreign corporate vehicle
  
• MA Tremonti Bond:
• first example of bonds that can be included in Tier 1 Tier 2

:

• Hybrid instruments
• privilege with respect to shareholders and preference shares of sottoscritori
• Duration of contract: minimum 10 years
• Minimum: 10 years
• Corporate bonds: there is no law for a minimum duration for corporate bonds. But
• bank bonds: The legislation provides for a minimum period of 60 months
• Suspension interest and repayment
• cumulation of interests: the coupon is suspended accumulated
  
• Subordinated debt level II
  
• privilege with respect to shareholders and preference shares of sottoscritori
• privilege with respect to the holders of hybrid instruments only if contractually
• non-suspension of interest and principal
• Max 50% Tier 1
  

Tier 3:

• Subordinated debt level III
• cover only market risk except clause lock.
  
• Contract Duration: min. 2 years
• Minimum duration: 2 years suspension
• interest and repayment
• cumulation interests suspended
• Max 250% free capital base

Advantages of equity instruments near

• no voting rights
• Minor problems of governance are less expensive
• equity debt tax shield
• Flexibility: you can pay to benefit from changes in market conditions