Leading Bank in the Americas Presentation
Canadian Bail-in Regulations: Key Features
Best in class approach
Post September 23, 2018, senior unsecured debt issued by Canadian DSIBS that is subject to bail-in is the
only format of issuance available¹ and is a single class of debt2 that is not subordinated to another class
of wholesale senior debt
• Canadian bank term senior unsecured debt is not structurally, statutorily or contractually subordinated
to another class of senior liabilities and therefore ranks equally to deposits and other senior liabilities in
liquidation
In the remote probability of default, the no creditor worse off principle ensures that bailed-in senior
creditors do not incur greater losses through resolution than liquidation. The CDIC compensation regime
ensures holders receive the difference between liquidation and resolution value
• Canada utilizes a statutory regime where, unlike the contractual regime of Canadian NVCC capital
instruments, there is no set conversion multiplier and there is flexibility for a partial or no bail-in of senior
debt even if NVCC instruments are converted
Canadian bank resolution framework provides senior debt holders with protection in that the relative
creditor hierarchy is maintained. Acceleration rights³ upon non-payment of principal or interest are
allowed in Canada
1 Excludes structured notes as defined in section 2(6) of the Bank Recapitalization (Bail-in) Conversion Regulations under the CDIC Act
2 Ranks pari passu with other forms of senior debt, except as otherwise prescribed by law and subject to the exercise of bank resolution powers
3 Subject to 30 business day grace period and subject to bail-in conversion powers until repaid in full
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