Determination : Subordinated debt - is a special kind of loan in which the banking organization, which opened in Russia within five years ago, to attract financial resources of the Central Bank to carry out its own activities for a period exceeding five years.The peculiarity of such a loan is fixed rate does not change during the term of the contract and does not exceed the rate of refinancing.
Typically, a subordinated loan is paid a lump sum after the expiration of the full loan as set out in the contract, and excluding become a situation where the bank-borrower is forced to cease their activities since the liquidation procedure.In this case, the lender issuing subordinated loans may not require from the insolvent bank borrowing their money until such time as will be fully satisfied with the financial requirements of all other creditors.
Features : domestic banks receiving subordinated loan, can completely turn loans into account its additional capital for a period of five years, if the contract is concluded with the Central Bank for a longer period.If, before the final payment of the loan is less than five years, the borrower can use the funds to increase equity only with restrictions.And in the case where the amount of the loan exceeds 50% of the share capital financial institution, such a loan should be considered as raised funds.
Terms : Currently, the subordinated loan is granted on the basis of an individual contract, which becomes the main feature of the existence of a point that the loan and accrued interest bank borrower can not return prematurely without first obtaining permission from the Central Bank.Only acts as a lender of the Central Bank may terminate the loan agreement after the agreement with the borrower of such action or add to the existing contract any changes.
Under current law, the bank-borrower can obtain a subordinated loan if both of the following conditions.Thus, the maturity of the debt must be less than five years, the terms of issue of debt bonds can not change without prior approval from the Central Bank of the Russian Federation, and is not permitted to pay any early part of the loan, or full body of the loan or the interest came running at him.But she had the interest rate prescribed in the conditions of the issuance of the loan, and in agreements between the lender and the borrower, the bank indicated its inability to complete the review before the expiry of the term loan.
usually a subordinated loan issued approximately on the same terms as other loans, and interest rates on the variety of loan virtually correspond to the average rate of interest on such loan programs.And if a bank borrower is in bankruptcy, the borrower will be able to receive their money after bankruptcy will satisfy the remaining creditors.
history : In 2008-2009, during the acute phase of the financial crisis of subordinated loans are used to maintain the stability of the Russian banking system.The role of the regulator is not performed if the Central Bank and Vnesheconombank, to provide some Russian ruble loans to credit institutions.The first such loan received Rosselkhozbank and VTB, as the level of their performance fully meet the minimum rating requirements, and capital of the banks increased by contributions from third parties and shareholders.
