Is the definition of credit institution as stipulated by the CRR fulfilled, if a company operates in the area of credit granting while its holding company issues corporate bonds ultimately listed to the open market?

More precisely, does the issuance of bonds by a holding company, first as a private placement but ultimately listed in the open market, whose subsidiary operates in the area of credit granting  qualify  as “continuing issuing repayable funds”, or is this activity are exempted from the scope, e.g. based on the CRD IV, recital 14?

An entity has gained a creditor license according to a Member State’s laws.

The holding company of the Group companies (including the abovementioned entity), issued corporate bonds. According to its publication, the holding company issued bonds at par with an annual interest rate and the new bonds are expected to be included in the Open Market on a stock exchange.

An application to list the bonds to trading on the Regulated Market will be done within 4 months thereafter. The bonds were targeted to professional investors only, but as the issuer intends to list them to trading on the Regulated Market, the bonds shall be publicly available and tradeable. 

Please note that as part of adjustments to the Single Rulebook Q&A process, agreed by the EBA and the European Commission, it has been decided to reject outstanding questions submitted before 1 January 2020, when the Q&A process was updated as part of the last ESAs Review. In particular, the question that you have submitted has now regrettably been rejected and will not be addressed.

If you believe your question would still benefit from clarification, you are invited to resubmit your question, adapting it to reflect any legislative, regulatory or other relevant developments that may have occurred since the initial date of submission. The EBA will aim to address resubmitted questions as a matter of priority. When considering to resubmit, you are kindly requested to observe the updated admissibility criteria agreed in the context of the adjustment of the Q&A process, available in the Additional background and guidance for asking questions. We hope for your understanding.

For further information please refer to the press release and the updated Q&A page.