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Subordinated Debt And Handling Of Multiple Instruments Under Single CUSIP. (Doc ID 2678028.1)

Last updated on MAY 10, 2021

Applies to:

Oracle Financial Services Data Foundation - Version 8.0.6 and later
Information in this document applies to any platform.


Subordinated Debt and Handling of multiple instruments under single CUSIP.
1. Advise on how the instruments – Equity and Junior subordinated debt which share the same CUSIP as of the TRUP securities must be sourced in FSDF.
2. Seniority flag to be added in Stg_Borrowings by FSDF – Data Model extension..

The use case and the scenario explained by customer as follows:
1.)Customer establishes a Trust “Core State Capital II” and invests money in the trust in the form of Equity.
2.)The trust then issues “Debt Securities” in the form of TRUPS i.e Trust Preferred Securities to 3rd party investors. The main objective of this issuance is itself to repay to the junior subordinated debt issued by Customer)
3.)Now the Trust wants to repay back to Customer out of the proceeds received from issuance of TRUPS.
However, the repayment is not a simple offset or a payment back to Customer. It is in the form of subscription to the issuance of Junior subordinated debt by customer.
4.) Customer issues Junior Subordinated debt and the Trust subscribes to the Junior Subordinated debt. (thus repaying the equity and the proceeds raised by issuance of TRUPS).
5.) The Trust ceases to exist upon the maturity of the Junior Subordinated debt.



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