Contingent Write-down Clause Samples
A Contingent Write-Down clause allows for the reduction of the principal amount or value of a financial instrument if certain predefined trigger events occur. Typically, this clause is found in debt instruments or regulatory capital securities, where the write-down is activated if the issuer's financial health deteriorates below a specified threshold, such as a drop in capital ratios or insolvency events. The core function of this clause is to provide a mechanism for loss absorption, protecting the issuer’s solvency and supporting financial stability during periods of distress.
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Contingent Write-down. If the Issuer has given a Write-down Notice in accordance with this Condition 6, on the relevant Writedown Date,
(i) the full principal amount of each Note shall automatically be written down to zero, the Notes shall be cancelled and all references to the principal amount of the Notes in these Terms and Conditions shall be construed accordingly;
(ii) the Holders shall be automatically deemed to irrevocably waive their right to receive, and no longer have any rights against the Issuer with respect to, repayment of the aggregate principal amount of the Notes written down pursuant to clause (i) above (bedingter Forderungsverzicht);
(iii) the Issuer shall pay (A) any accrued and unpaid interest on the Notes and (B) any Additional Amounts, in the case of each of subclauses (A) and (B) of this clause (iii), if and only to the extent that such interest or Additional Amount, as applicable, became due and payable to the Holders prior to the relevant Write-down Notice Date; and
(iv) except as described in clause (iii) above, all rights of any Holder for payment of any amounts under or in respect of the Notes (including, without limitation, any amounts arising as a result of, or due and payable upon the occurrence of, an Event of Default) shall become null and void, irrespective of whether such amounts have become due and payable prior to the relevant Write-down Notice Date or the Write-down Date.
Contingent Write-down. (a) Trigger Event
(i) Upon the occurrence of a Trigger Event, a Contingent Write-down will occur on the Trigger Event Write-down Date in accordance with clause (d) of this Condition 6.
(ii) A "Trigger Event" is deemed to have occurred if the Issuer gives the Holders a Trigger Event Write-down Notice in accordance with clause (b) of this Condition 6.