In the context of a bond issued by a subsidiary to the parent company recognized as Own Funds or Eligible Liability, would it be possible to insert a clause of change of control that would allow the parent company, if it is no longer the owner of the subsidiary, to automatically sell the bond to the purchaser of the subsidiary?
In the past few years, we have seen an increase in the number of M&A transactions in the banking space, which is consolidating. Some banks have been for instance look at selling some subsidiaries. In this context, it would not make sense for the bank to remain the holder of internal Own Funds or Eligible Liability instruments once it is no longer the parent company. It would be therefore interesting to explore options to organize the substitution of the seller by the buyer of the subsidiary.
This question has been rejected because the issue it raises is beyond the remit of the Q&A process and as such it cannot be addressed via a Q&A. The issue will be answered in the monitoring report on TLAC-MREL instruments.
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