Question ID
2026_7797
Legal act
Directive 2014/59/EU (BRRD)
Topic
BRRD Reporting
Article
Z02.00 and Z12.00
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Regulation (EU) 2025/2303 - ITS on Resolution Planning Reporting
Article/Paragraph
II.3 Z 02.00 - Liability Structure (LIAB 1)
Type of submitter
Credit institution
Subject matter
Where to classify Tier2 Subordinated issuances when they loss their MREL computability due to an earlier call (already announced on markets)
Question

When a subordinated issuance loses its MREL eligibility due to an early call that has been announced to the market but not yet executed, should it be reported in row r037x or r0531?

Additionally, if r037x is selected, should the Insolvency Ranking be adjusted accordingly under Spanish regulation?

Background on the question

r037x:
Subordinated liabilities (not recognised as own funds)

Liabilities which will only be repaid under national insolvency law after all classes of ordinary creditors and senior non-preferred creditors have been repaid in full. This includes both contractually and statutorily subordinated liabilities. In the case of holding companies, unsubordinated debt securities may also be reported in this category (i.e. structural subordination).

Only subordinated instruments that are not recognized as own funds shall be included in this category. 

This row shall also include that part of subordinated liabilities that qualifies in principle as own funds, but is not included in own funds due to phase-out provisions such as Article 64 of Regulation (EU) No 575/2013 (remaining maturity) or Part 10 of the Regulation (EU) No 575/2013 (grandfathering impact). 

r0531:
Of which: (part of) subordinated liabilities recognised as own funds
This breakdown identifies the legal instruments that constitute (part of) Tier 2 own funds.
 

Submission date
Final publishing date
Final answer

Where prior permission to redeem a Tier 2 instrument has been obtained and redemption is sufficiently certain, including where the institution has publicly announced its intention to redeem it in accordance with Article 28 of Commission Delegated Regulation (EU) No 241/2014, the amount to be redeemed shall be deducted from Tier 2 own funds before redemption takes place. Accordingly, in template Z 02.00,  row 0530 shall reflect Tier 2 capital after the applicable deduction. The deduction does not in itself cause the underlying instrument to cease to qualify as a Tier 2 instrument. Accordingly, the instrument shall continue to be reflected in row 0531 “of which: (part of) subordinated liabilities recognised as own funds”, subject to any applicable phase-out under Article 64 CRR.

The deduction does not alter the legal nature or insolvency ranking of the instrument, which shall continue to reflect the applicable national insolvency framework. In template Z 12.00, the “Amount meeting the conditions for MREL eligibility”  shall reflect the applicable deduction and shall therefore be reported as zero for the amount deducted following the announced redemption.

Status
Final Q&A
Answer prepared by
Answer prepared by the EBA.

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