Securities Act of 1933
Rule 144A

Response of the Office of Chief Counsel
Division of Corporation Finance

March 28, 2019

Leslie N. Silverman
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, NY 10006-1470

Re: Eligibility of certain contingent convertible capital securities for an offering under Securities Act Rule 144A

Dear Mr. Silverman:

We are responding to your request dated March 25, 2019, addressed to the Office of Chief Counsel.  You have requested the Division's views about the offer and sale of certain contingent convertible capital securities with conversion features that could result in the securities being deemed to be of the same class as listed securities of the issuer.  Based on the facts presented, the Division will not recommend enforcement action to the Commission if offers and sales of contingent convertible capital securities are made in reliance on Rule 144A as described in your letter notwithstanding the fact that the conversion premium may be less than 10 percent or not determinable at the time of issuance.  In reaching this position, we note that:

• The contingent convertible securities would qualify as regulatory capital and would be issued solely for the purpose of satisfying regulatory capital requirements under relevant national standards.

• The contingent convertible securities would not be, when issued, of the same class as securities listed on a national securities exchange or quoted on a U.S. automated inter-dealer quotation system.

• The contingent convertible securities would automatically and mandatorily convert into common stock upon the occurrence of a trigger event outside the relevant issuer's and securityholders' control and such a trigger event would be due to a regulator's assessment of the issuer's viability and/or insolvency, and/or the issuer's common equity tier 1 capital ratio falling below a specified percentage.

• Neither the issuer nor securityholders would have the option to convert the contingent convertible securities into common stock of the issuer.

This position is based on the representations made to the Division in your letter.  Any different facts or conditions might require the Division to reach a different conclusion.  Further, this response expresses the Division's position on enforcement action only.  It does not express any legal conclusion on the question presented.

Incoming Letter:

The Incoming Letter is in Acrobat format.

http://www.sec.gov/divisions/corpfin/cf-noaction/2019/contingent-convertible-capital-securities-032819-501a.htm