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Interest Payments and Returns

Can the issuer skip interest payment of Tier I & II bonds?

If the issuer fails to maintain a certain capital ratio, then the issuer can skip the interest payments of Tier I and Tier II bonds. Also, in the event that a Bank is suffering losses and does not have enough capital reserves to pay interests of its Tier I, it can skip interest income of Tier I Bonds. If it still falls short of reserves in paying the interest of Tier II Bonds, it can skip the payment for these Tier II Bonds as well.

If the issuer fails to maintain a certain capital ratio, then the issuer can skip the interest payments of Tier I and Tier II bonds. Also, in the event that a Bank is suffering losses and does not have enough capital reserves to pay interests of its Tier I, it can skip interest income of Tier I Bonds. If it still falls short of reserves in paying the interest of Tier II Bonds, it can skip the payment for these Tier II Bonds as well.

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