principal terms and conditions of the proposal · (vi) status on residence : resident controlled...

PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSAL PROPOSED ISSUANCE OF ADDITIONAL TIER 1 CAPITAL SECURITIES PURSUANT TO AN ADDITIONAL TIER 1 CAPITAL SECURITIES PROGRAMME OF UP TO RM10.0 BILLION AND/OR ITS FOREIGN CURRENCY EQUIVALENT IN NOMINAL VALUE

1. BACKGROUND INFORMATION OF THE ISSUER (i) Name : Malayan Banking Berhad (“Maybank” or “the Issuer”)

(ii) Address : 14th Floor, Menara Maybank 100, Jalan Tun Perak 50050 Kuala Lumpur Malaysia

(iii) Business registration number

: 3813-K

(iv) Date and place of incorporation

: 31 May 1960/Malaysia

(v) Date of listing : 17 February 1962

(vi) Status on residence : Resident controlled company

(vii) Principal Activities : Maybank is the holding company and the major operating entity of the Maybank group of companies (“Maybank Group”). Maybank is principally engaged in all aspects of commercial banking and related financial services. The subsidiaries of Maybank are principally engaged in the businesses of banking and finance, Islamic banking, investment banking (including stock broking), general and life insurance, general and family takaful, trustee and nominee services, asset management and venture capital.

(viii) Board of Directors : The Board of Directors of Maybank as at 19 June 2014 are as follows: 1. Dato’ Mohd Salleh bin Haji Harun

2. Tan Sri Dr. Hadenan bin A. Jalil

3. Dato’ Dr. Tan Tat Wai

4. Tan Sri Dato’ Megat Zaharuddin bin Megat Mohd Nor

5. Dato’ Seri Ismail bin Shahudin

Malayan Banking Berhad AT1CS Programme of up to RM10.0 billion and/or its foreign currency equivalent in nominal value

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6. Cheah Teik Seng

7. Dato’ Johan bin Ariffin

8. Datuk Mohaiyani binti Shamsudin

9. Datuk Abdul Farid Bin Alias

10. Erry Riyana Hardjapamekas

(ix) Structure of

shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders

: The substantial shareholders (with shareholding of 5% and above) as at 19 June 2014 are as follows:

Substantial shareholders

Shareholding

No. of shares held %

Amanah Raya Trustees Berhad

(B/O: Skim Amanah Saham Bumiputera)

3,552,682,730 38.97

Citigroup Nominees (Tempatan) Sdn Bhd (B/O: Employees Provident Fund Board)

1,193,599,726 13.09

Permodalan Nasional Berhad

487,033,079 5.34

(x) Authorised and paid-up share capital

: Authorised Share Capital as at 19 June 2014 RM10,000,000,000 comprising 10,000,000,000 ordinary shares of RM1.00 each. Issued and Paid-Up Share Capital as at 19 June 2014 RM9,115,884,394 comprising 9,115,884,394 ordinary shares of RM1.00 each.

(xi) Disclosure of the following

:

If the Issuer or its board members have been convicted or charged with any offence under the securities laws, corporation laws or

: None


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other laws involving fraud or dishonesty in a court of law, for the past five years prior to the date of application; and

If the Issuer has

been subjected to any action by the stock exchange for any breach of the listing requirement or rules issued by the stock exchange, for the past five years prior to the date of application.

: None

2. PRINCIPAL TERMS AND CONDITIONS OF THE AT1 PROGRAMME (a) Names of parties involved in the proposal, where applicable:

(i) Principal adviser

: Maybank Investment Bank Berhad (“Maybank IB”).

(ii) Lead arranger

: Maybank IB.

(iii) Co-arranger

: Not applicable.

(iv) Solicitor

: Adnan Sundra & Low.

(v) Financial adviser

: Not applicable.

(vi) Technical adviser :

Not applicable.

(vii) Bond trustee

: For Ringgit (“RM”) denominated issuances Pacific Trustees Berhad. For non-RM denominated issuances Not applicable.

(viii) Guarantor :

Not applicable.


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(ix) Valuer : Not applicable.

(x)

Facility agent : For RM denominated issuances Maybank IB. For non-RM denominated issuances Such person as may be appointed prior to each issuance.

(xi) Primary subscriber (under a bought-deal arrangement) and amount subscribed

: Not applicable.

(xii) Underwriter and amount underwritten

: Not applicable.

(xiii) Central depository

: For RM denominated issuances Bank Negara Malaysia (“BNM”). For non-RM denominated issuances Such central depository to be appointed prior to each issuance.

(xiv) Paying agent

: For RM denominated issuances BNM For non-RM denominated issuances Such person as may be appointed prior to each issuance.

(xv) Reporting accountant

:

Not applicable.

(xvi) Calculation agent : Not applicable.


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(xvii) Others (please specify)

: Lead Manager

For RM denominated issuances: Maybank IB and/or such other lead manager as may be appointed from time to time. For non-RM denominated issuances: Such other persons to be appointed, if required, for the non-RM denominated issuances, from time to time.

Such other parties to be appointed for the non-

RM issuance, if required.

(b) Facility description : An Additional Tier 1 Capital Securities Programme (“AT1CS Programme”) of up to RM10.0 billion and/or its foreign currency equivalent in nominal value for issuance of Additional Tier 1 Capital Securities thereunder (“AT1CS”). The AT1CS shall comply with BNM’s Capital Adequacy Framework (Capital Components) (issued on 28 November 2012 (“BNM Capital Adequacy Framework”) in relation to requirements of an Additional Tier 1 capital instrument.

(c) Issue / debt programme size

: Up to RM10.0 billion and/or its foreign currency equivalent in nominal value. The Issuer shall have the option to upsize the AT1CS Programme limit provided that (a) there is no adverse impact on the rating of the AT1CS Programme; and (b) relevant regulatory approvals have been obtained (including from the Securities Commission Malaysia (“SC”) and BNM). For the avoidance of doubt, the holders of the AT1CS (“Securityholders”) hereby consent to any such upsizing of the programme limit.

(d) Tenure of issue / debt programme

: Tenure of the AT1CS Programme Perpetual from the date of first issuance (“Issue Date”) of the AT1CS. Tenure of the AT1CS Perpetual. Each AT1CS shall have a callable option (“Call Option”) pursuant to the Optional Redemption (as defined in clause 2(u)) to allow the Issuer to redeem (in whole or in part) that tranche of the AT1CS on a Call


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Date (as defined below) at the Redemption Amount (as defined in clause 2(u)), subject to the Redemption Conditions (as defined in clause 2(u)) being satisfied. “Call Date” means any Distribution Payment Date (as defined in clause 2(g)) after a minimum period of five (5) years from the Issue Date of that tranche of AT1CS, including the First Call Date. “First Call Date” shall refer to the Distribution Payment Date after a minimum period of five (5) years from the Issue Date of that tranche of AT1CS.

(e) Availability period of debt programme

: The AT1CS Programme is available upon execution of the Transaction Documents (as defined in clause 2(v)(13))and compliance with (or waiver of) all relevant conditions precedent to the satisfaction of the Lead Arranger for as long as the AT1CS Programme subsists. The first AT1CS shall be issued within two (2) years from the date of SC’s approval and authorisation.

(f) Interest / coupon rate

: Subject to, inter alia, clause 2(v)(3) (Limitation on Payment) and clause 2(v)(5) (Distributable Reserves), the AT1CS confer a right to receive coupon (“Distributions”) from (and including) the Issue Date at the applicable coupon rate (“Distribution Rate”). The Distribution Rate applicable to each tranche of the AT1CS shall be: (i) in respect of the period from (and including) the

Issue Date of that tranche to (but excluding) the First Call Date of that tranche, at either of the following (to be determined prior to issuance):

(a) a fixed rate per annum of the principal

amount of that tranche; or (b) a floating rate, to be reset semi-annually or

such other frequency to be determined prior to issuance, at a rate per annum, i.e. at the Initial Spread for Floating Rate (as defined below) above the Relevant Floating Rate Benchmark (as defined below) of the principal amount of that tranche; and

(ii) in respect of the period from (and including) the

First Call Date of that tranche to (but excluding)


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the immediately following Reset Date (as defined below) of that tranche and every equivalent period thereafter, at either of the following rate (to be determined prior to issuance): (a) a fixed rate at the Relevant Reset Distribution

Rate (as defined below) of the principal amount of that tranche; or

(b) a floating rate, to be reset semi-annually or

such other frequency to be determined prior to issuance, at a rate per annum, i.e. at the Initial Spread for Floating Rate above the Relevant Floating Rate Benchmark of the principal amount of that tranche.

“Initial Spread for Fixed Rate” means the initial spread for fixed rate to be determined at the point of issuance of the relevant tranche of the AT1CS, where applicable, and expressed as a rate in per cent. per annum, being the initial spread above the interest rate swap rate in per cent. per annum for the relevant Reference Period. The Initial Spread for Fixed Rate shall be calculated at the point of issuance and shall be applicable throughout the tenure of the relevant AT1CS; “Initial Spread for Floating Rate” means the initial spread for the floating rate to be determined at the point of issuance of the relevant tranche of the AT1CS, where applicable, and expressed as a rate in per cent. per annum, being the initial spread above Kuala Lumpur Interbank Offered Rate (“KLIBOR”) for six-months (or such other relevant period) Ringgit deposits or such other appropriate inter-bank rate for six-months (or such other relevant period) deposits of the relevant currency. The Initial Spread for the Floating Rate shall be calculated at the point of issuance and shall be applicable throughout the tenure of the relevant AT1CS; “Reference Period” means, in relation to a tranche of the AT1CS, a period of time equal to that commencing on the issue date of that tranche and ending on the date immediately before the First Call Date of that tranche (“Initial Period”), and being a minimum period of five (5) years and shall also include every subsequent period of time after the First Call Date equivalent to the Initial Period;


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“Relevant Floating Rate Benchmark” means KLIBOR for six-months (or such other relevant period) Ringgit deposits or such other appropriate inter-bank rate for six-months (or such other relevant period) deposits of the relevant currency in which the relevant tranche of the AT1CS is issued; “Relevant Reset Distribution Rate” means a fixed rate per annum equal to the relevant prevailing interest rate swap rate in per cent. per annum for the relevant Reference Period with respect to the relevant Reset Date plus the Initial Spread for Fixed Rate. The interest rate swap rate shall be determined and notified by the Facility Agent (or any other similar agency) to the Issuer and the Securityholders as published by a recognised industry body or a relevant authority at or about the time prescribed by the recognised industry body or the relevant authority on the second (2nd) business day preceding the relevant Reset Date; and “Reset Date” means each date falling on the first day of each Reference Period after the First Call Date of the relevant tranche of the AT1CS.

(g) Interest / coupon payment frequency

: Subject to, inter alia, clause 2(v)(3) (Limitation on Payment) and clause 2(v)(5) (Distributable Reserves), the AT1CS confer a right to receive Distributions at the applicable Distribution Rate, payable on a date falling semi-annually or such other frequency to be determined prior to issuance in arrears (“Distribution Payment Date”).

(h) Interest/coupon payment basis

: For RM denominated issuances In respect of any period ending, the actual number of days in the relevant period divided by 365. For non-RM denominated issuances The interest/coupon payment basis is to be determined prior to each issuance.

(i) Security/collateral, where applicable

: None.


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(j) Details on utilisation of proceeds by the Issuer

: The proceeds from the AT1CS will be utilised to fund Maybank’s working capital, general banking and other corporate purposes, including the refinancing of any borrowings incurred and/or any debt instruments issued by the Issuer and/or relating thereto.

(k) Sinking fund and designated accounts, where applicable

: None.

(l) Rating Credit ratings

assigned and whether the rating is final or indicative

Name of credit

rating agencies

: For RM denominated issuances The rating for the AT1CS Programme is AA3. The rating agency is RAM Rating Services Berhad. For non-RM denominated issuances The rating requirement is exempted under paragraph 4.11(b) of the SC’s “Guidelines on Private Debt Securities” in respect of the non-RM denominated AT1CS. However, in the future, the non-RM denominated AT1CS may be rated by international rating agency(ies).

(m) Mode of issue : The AT1CS may be issued via private placement on a

best effort basis or book building on a best effort basis. For RM denominated issuances Issuance of the AT1CS shall be in accordance with (1) the Participation and Operation Rules for Payments and Securities Services (“MyClear Rules”) issued by Malaysian Electronic Clearing Corporation Sdn Bhd (“MyClear”); and (2) the Operational Procedures for Securities Services issued by MyClear (“MyClear Procedures”), as amended or substituted from time to time (collectively, “MyClear Rules and Procedures”), subject to such variation, amendments or exemptions (if any) from time to time. For non-RM denominated issuances The AT1CS shall be issued in accordance with the procedures and rules of the relevant jurisdiction.


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(n) Selling Restrictions, including tradability, i.e. whether tradable or non-tradable

: The AT1CS is tradable and transferable subject to the Selling Restrictions described below. Selling Restrictions at issuance for RM denominated AT1CS The AT1CS may only be offered, sold, transferred or otherwise disposed directly or indirectly, to a person to whom an offer for subscription or purchase of, or invitation to subscribe for or purchase of the AT1CS and to whom the AT1CS are issued would fall within: (i) Schedule 6 (or Section 229(1)(b)) or Schedule 7

(or Section 230(1)(b)); read together with (ii) Schedule 9 (or Section 257(3))

of the Capital Markets and Services Act, 2007, (“CMSA”) as amended from time to time, and such other selling restrictions as may be applicable outside Malaysia. Selling Restrictions after issuance for RM denominated AT1CS The AT1CS may only be offered, sold, transferred or otherwise disposed directly or indirectly, to a person to whom an offer for subscription or purchase of, or invitation to subscribe for or purchase of the AT1CS and to whom the AT1CS are issued would fall within: (i) Schedule 6 (or Section 229(1)(b)); read together

with (ii) Schedule 9 (or Section 257(3)) of the CMSA as amended from time to time, and such other selling restrictions as may be applicable outside Malaysia. Selling Restrictions at issuance for non-RM denominated AT1CS The AT1CS may only be offered, sold, transferred or otherwise disposed directly or indirectly, to a person to whom an offer for subscription or purchase of, or invitation to subscribe for or purchase of the AT1CS and to whom the AT1CS are issued would fall within:


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(i) Schedule 6 (or Section 229(1)(b)) or Schedule 7 (or Section 230(1)(b)); read together with

(ii) Schedule 8 (or Section 257(3)) of the CMSA as amended from time to time, and such other selling restrictions as may be applicable outside Malaysia. Selling Restrictions after issuance for non-RM denominated AT1CS The AT1CS may only be offered, sold, transferred or otherwise disposed directly or indirectly, to a person to whom an offer for subscription or purchase of, or invitation to subscribe for or purchase of the AT1CS and to whom the AT1CS are issued would fall within: (i) Schedule 6 (or Section 229(1)(b)); read together

with (ii) Schedule 8 (or Section 257(3)) of the CMSA as amended from time to time, and such other selling restrictions as may be applicable outside Malaysia. Tradability for RM and non-RM denominated AT1CS The AT1CS are transferable (but subject to the Selling Restrictions described above) and tradable under (a) the Rules on Scripless Securities under the Real Time Electronic Transfer of Funds and Securities System operated by MyClear or (b) such other clearing and settlement rules of the relevant jurisdiction.

(o) Listing status and types of listing, where applicable

: For RM denominated issuances The AT1CS may be listed on Bursa Malaysia Securities Berhad under an Exempt Regime pursuant to Chapter 4B of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements. For non-RM denominated issuances The AT1CS may be listed on such exchange in the future subject to approval from the listing authorities of the relevant jurisdiction and/or other regulatory


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authorities, if applicable.

(p) Other regulatory approvals required in the relation to the issue, offer or invitation to subscribe or purchase PDS, and whether or not obtained

: Approval from BNM has been obtained on 14 July 2014 for the proposed establishment of the AT1CS Programme.

(q) Conditions Precedent

: To include conditions precedent customary for transactions of this nature (all have to be in form and substance acceptable to the Principal Adviser / Lead Arranger). Conditions precedent for first issuance of AT1CS Conditions Precedent for the first issuance of AT1CS under the AT1CS Programme including, but not limited to the following: A. Main Documentation

The relevant Transaction Documents in relation to the AT1CS Programme have been duly executed, and where applicable stamped (unless otherwise exempted) and presented for registration.

B. Issuer

Receipt from the Issuer of:

(i) Certified true copies of the Certificate of Incorporation and the Memorandum and Articles of Association of the Issuer;

(ii) Certified true copies of the most recent

Forms 24, 44 and 49 of the Issuer; (iii) Certified true copy of the board resolution of

the Issuer authorising, among others, the establishment of the AT1CS, issuance of the AT1CS and the execution of all relevant documents thereto;

(iv) A list of the Issuer’s authorised signatories

and their respective specimen signatures;


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(v) A report of the relevant company search of the Issuer; and

(vi) A report of the relevant winding up search

conducted on the Issuer.

C. General

(i) Evidence that the approval and authorisation from BNM and SC in respect of the establishment of the AT1CS Programme has been obtained;

(ii) Confirmation from the rating agency that the

AT1CS Programme has obtained a minimum rating of AA3 by the rating agency; and should a rating by international rating agency(ies) for the non-RM denominated AT1CS be required by the investor(s), receipt of such rating(s) acceptable to the Lead Manager;

(iii) Satisfactory legal opinion from the Solicitor confirming with respect to the legality, validity and enforceability of the Transaction Documents and confirmation that all conditions precedent thereto have been fulfilled; and

(iv) Such other conditions precedent to be

advised by the Solicitor and agreed by the Issuer.

Conditions for subsequent issuance of AT1CS (i) Evidence that the approval from BNM has been

obtained (if applicable); and (ii) Such other conditions to the subsequent issuance

customary for transaction of this nature, as may be advised by the Solicitor and agreed by the Issuer.


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(r) Representations and Warranties

: Representations and warranties usual and customary for an issuance of such nature, which shall include but not limited to the following:- (i) The Issuer (a) has been duly incorporated and

validly exists under the Companies Act 1965 of Malaysia, (b) has full power and authority to engage in the business of banking and finance in Malaysia and each other jurisdiction where it is so engaged and conduct its business, and (c) is duly qualified to transact business under the laws of Malaysia and each other jurisdiction in which it owns or leases properties, or conduct any business, so as to require such qualification, other than where the failure to be so qualified would not have a material adverse effect on the Issuer’s ability to perform its obligations under the Transaction Documents;

(ii) The issuance of the AT1CS have been duly

authorised, and when issued and delivered pursuant to the Transaction Documents, will have been duly executed, authenticated, issued and delivered and will constitute valid and binding obligations of the Issuer entitled to the benefits provided by the Transaction Documents;

(iii) No event has occurred which would constitute an

event of default under the AT1CS or which with the giving of notice or the lapse of time or other condition would constitute an event of default;

(iv) The Issuer is not in breach of the provisions of

any law or regulations governing such approvals, consents, authorisation and/or such licenses and, after due and careful consideration, the Issuer is not aware of any reason why such approval, consent, authorisation and/or license should be withdrawn or cancelled or any conditions attached thereto adversely altered, other than where the absence of such approval, consent, authorisation and/or license would not have a material adverse effect on the Issuer’s ability to perform its obligations under the Transaction Documents;

(v) There are no legal or governmental proceedings

pending or, to the knowledge of the Issuer, threatened, to which the Issuer is or may be a


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party or to which any property or asset of the Issuer is or may be the subject which, if determined adversely to the Issuer, could individually or in the aggregate reasonably be expected to have a material adverse effect on the business, financial position, shareholders’ funds or results of operations of the Issuer;

(vi) The Issuer has all licenses, franchises, permits,

authorisations, approvals, orders and other concessions of and from all governmental and regulatory officials and bodies that are necessary to own or lease its properties and conduct its business, other than where the failure to obtain such licenses, franchises, permits, authorisations, approvals, orders and other concessions would not have a material adverse effect on the Issuer Issuer’s ability to perform its obligations under the Transaction Documents; and

(vii) The Issuer and its obligations under the

Transaction Documents and the AT1CS are subject to commercial law and to suit in Malaysia and neither the Issuer nor any of its properties, assets or revenues has any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any court, from set off or counterclaim, from the jurisdiction of any court, or other legal process or proceeding for the giving of any relief or for the enforcement of judgment, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with the Transaction Documents and the AT1CS.

For the purpose of this clause, “material adverse effect” means the occurrence of any event which materially and adversely affects the ability of the Issuer to perform any of its obligations under any of the Transaction Documents or which materially and adversely affects the business, financial position, shareholders’ funds or results of the operations of the Issuer.

(s) Events of Default and enforcement events, where applicable

: “Enforcement Events” means the occurrence of any of the following events: (i) Non-payment: the Issuer fails to pay any amount

in respect of the AT1CS when due and payable


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and such failure continues for a period of seven (7) business days. For the avoidance of doubt, no Distribution will be due and payable if such Distribution has been cancelled or is deemed cancelled (in each case, in whole or in part) as described under "Limitation on Payment". Accordingly, no default in payment under the AT1CS will have occurred or be deemed to have occurred in such circumstances; or

(ii) Winding-Up: If:

(a) a court or an agency or regulatory authority in

Malaysia having jurisdiction in respect of the same shall have instituted any proceeding or entered a decree or order for the appointment of a receiver or liquidator in any insolvency, rehabilitation, readjustment of debt, marshalling of assets and liabilities, or similar arrangements involving the Issuer or all or substantially all of its property, or for the winding up of or liquidation of its affairs and such proceeding, decree or order shall not have been vacated or shall have remained in force, undischarged or unstayed for a period of sixty (60) days; or

(b) the Issuer has filed a petition to take

advantage of any insolvency statute. Upon the occurrence of event (i) (Non-payment) above, subject to the terms of the AT1CS, the Trustee may or shall (if directed to do so by a extraordinary resolution of the Securityholders) institute proceedings to enforce the payment obligations under the relevant AT1CS and may institute proceedings in Malaysia for the winding up of the Issuer, provided that neither the Trustee nor any of the Securityholders shall have the right to accelerate payment of the relevant AT1CS in the case of default in the payment of any amount owing under the relevant AT1CS or any non-performance of any condition, provision or covenant under the Trust Deed or AT1CS. Upon occurrence of event (ii) (Winding-up) above, subject to the terms of the AT1CS, the Trustee may or shall (if directed to do so by a extraordinary resolution of the Securityholders) declare (by giving written notice


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to the Issuer) that the AT1CS together with all other sums payable under the AT1CS shall become and be immediately due and payable at its nominal value together with the accrued and uncancelled but unpaid Distribution (if any), whereupon such amounts shall become and be immediately due and payable. The occurrence of event (i) (Non-payment) in respect of one tranche of the AT1CS shall not trigger an Enforcement Event in respect of the other tranches of the AT1CS.

(t) Covenants

: In respect of the RM denominated issuances, the Issuer shall comply with such applicable covenants as may be advised by the Solicitor and which are required in order to comply with any relevant guidelines or laws, including but not limited to the following: (i) At all times comply with its obligations under the

Transaction Documents; (ii) Redeem in full or in part outstanding AT1CS in

accordance with the terms and conditions of the Transaction Documents;

(iii) At all times provide the Trustee such information

as it may reasonably require in order to discharge its duties and obligations as trustee relating to the Issuer’s affairs to the extent permitted by law;

(iv) At all times exercise reasonable diligence in

carrying on its business in a proper and efficient manner which should ensure, amongst others, that all necessary approvals or relevant licences are obtained and maintained;

(v) At all times maintain a paying agent who is based

in Malaysia; (vi) Procure that the paying agent shall notify the

Trustee, through the Facility Agent, in the event that the paying agent does not receive payment from the Issuer on the due dates as required under the Transaction Documents;

(vii) At all times keep proper books and accounts and

to provide the Trustee and any person appointed by it (e.g. auditors) access to such books and


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accounts to the extent permitted by law; (viii) Notify the Trustee in the event that the Issuer

becomes aware of the following:

(a) any event of default or that such other right or remedy under the terms, provisions and covenants of the AT1CS and the Trust Deed have become immediately enforceable;

(b) any circumstance that has occurred that

would materially prejudice the Issuer; (c) any substantial change in the nature of the

business of the Issuer; (d) any change in the utilisation of proceeds from

the AT1CS other than for the purpose stipulated in the information memorandum and the Transaction Documents;

(e) of any other matter that may materially

prejudice the interest of the holders of the AT1CS; and

(f) any change in the Issuer’s withholding tax

position; (ix) Deliver to the Trustee a copy of its annual audited

accounts within 180 days after the end of each financial year, and any other accounts, reports, notices, statements or circulars issued to shareholders; and

(x) Deliver to the Trustee annually a certificate that

the Issuer has complied with its obligations under the Trust Deed and the terms and conditions of the AT1CS and that there did not exist or had not existed, from the date the AT1CS were issued, any event of default and if such is not the case, to specify the same.

In respect of the non-RM denominated issuances, the Issuer shall comply with such applicable covenants which are to be agreed between the relevant parties and are required in order to comply with the relevant guidelines or laws in the relevant jurisdiction.


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(u) Provision on buy-back and early redemption of the PDS

: (i) Purchase and Cancellation The Issuer or any of its subsidiaries or agents of the Issuer may at any time purchase, subject to the prior approval of BNM (but which approval shall not be required for a purchase done in the ordinary course of business) the AT1CS or part thereof at any price in the open market or by private treaty provided no Non-Viability Event has occurred prior to the date of such purchase. If purchase is made by tender, such tender must (subject to any applicable rules and regulations) be made available to all holders of the AT1CS equally. Subject to prior approval by BNM (where applicable), the AT1CS purchased by the Issuer or its subsidiaries or agents of the Issuer (other than in the ordinary course of business) shall be cancelled and shall not be resold. The AT1CS purchased by other related corporations (other than its subsidiaries) or any interested person of the Issuer, which includes the directors, major shareholders and chief executive officer, need not be cancelled but they will not entitle such related corporations or interested person of the Issuer to vote under the terms of the AT1CS subject to any exceptions in the SC’s Trust Deeds Guidelines. For the purpose of this clause, the term “related corporation” has the meaning given to it in the Companies Act, 1965 and the term “ordinary course of business” includes those activities performed by the Issuer or its subsidiaries or agents of the Issuer or any related corporation of the Issuer for third parties and excludes those performed for own account of the Issuer or its subsidiaries or agents of the Issuer or such related corporation.

(ii) Optional Redemption

The Issuer may at its option, on a Call Date, and subject to the Redemption Conditions being satisfied, redeem in whole or in part, of the AT1CS at the Redemption Amount. The optional


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redemption of one tranche of the AT1CS shall not trigger the redemption of other tranches of the AT1CS.

(iii) Regulatory Redemption The AT1CS may be redeemed at the option of the Issuer in whole or in part, and subject to the Redemption Conditions being satisfied, at any time at the Redemption Amount, if a Regulatory Event has occurred and is continuing. “Regulatory Event” means that, if there is more than an insubstantial risk, as determined by the Issuer, that: (i) the AT1CS or any tranche of AT1CS (in

whole or in part) will, either immediately or with the passage of time or upon either the giving of notice or fulfillment of a condition, no longer qualify as Additional Tier 1 Capital of the Issuer for the purposes of BNM’s capital adequacy requirements under any applicable regulations; or

(ii) changes in law will make it unlawful to

continue performing its obligations under the AT1CS or any tranche of AT1CS.

(iv) Tax Redemption

The AT1CS may be redeemed at the option of the Issuer in whole or in part, and subject to the Redemption Conditions being satisfied, at any time at the Redemption Amount, if a Tax Event has occurred and is continuing. “Tax Event” means that, if there is more than an insubstantial risk that:

(i) the Issuer has or will become obliged to pay

any additional taxes, duties, assessments or government charges of whatever nature in relation to the AT1CS;

(ii) the Issuer would no longer obtain tax

deductions for the purposes of Malaysian corporation tax for any payment in respect of


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the AT1CS,

as a result of any change in, or amendment to, the laws or regulations of Malaysia or any political subdivision or any authority thereof or therein having power to tax (or any taxing authority of any tax jurisdiction in which the Issuer is a tax resident), or any change in the official application or interpretation of such laws or regulations, which change or amendment is announced and becomes effective on or after the Issue Date and such obligation cannot be avoided by the Issuer after taking reasonable measures available to it, subject to the Redemption Conditions being satisfied.

For the avoidance of doubt, for the purpose of this clause 2(u), redemption in part of the AT1CS may be carried out on a pro-rata basis or on selective basis (for instance in the case of purchase by the Issuer in the open market or by private treaty). “Redemption Amount” means the principal amount of the AT1CS, together with Distributions accrued and not cancelled but unpaid (if any) to (but excluding) the redemption date. “Redemption Conditions” means: (i) the Issuer is solvent at the time of any redemption

of that tranche of AT1CS or part thereof and immediately thereafter;

(ii) the Issuer has obtained the written approval of

BNM prior to redemption of that tranche of AT1CS or part thereof; and

(iii) the Issuer:

(a) shall replace that tranche of AT1CS or part

thereof to be redeemed with capital of the same or better quality and the replacement of this capital is done at conditions which are sustainable for the income capacity of the Issuer; or

(b) demonstrates that its capital position is and can be sustained well above the minimum


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capital adequacy and capital buffer requirements as imposed by BNM after the redemption is exercised.

(v) Other principal terms and conditions for the proposal

(1) Status of the AT1CS : The AT1CS constitute direct, unsecured and

subordinated obligations of the Issuer and shall at all times rank pari passu and without any preference among themselves. The rights and claims of the Securityholders are subordinated in the manner described below. Subject to the laws of Malaysia, in the event of a Winding-Up (as defined below) of the Issuer, the rights of the Securityholders to payment of principal and Distributions on the AT1CS and any other obligations in respect of the AT1CS are expressly subordinated and subject in right of payment to the prior payment in full of all claims of Senior Creditors (as defined below, which includes, but is not limited to, holders of Tier II Capital Instruments (as defined below)) and will rank senior to all Junior Obligations. The AT1CS will rank pari passu with Parity Obligations. “Junior Obligation” means any ordinary share of the Issuer. “Parity Obligation” means the most junior class of preference shares and any security or other similar obligation issued, entered into or guaranteed by the Issuer that constitutes or could qualify as Additional Tier I capital of the Issuer on an unconsolidated or consolidated basis, pursuant to the relevant requirements set out in BNM Capital Adequacy Framework, or otherwise ranks or is expressed to rank, by its terms or by operation of law, pari passu with the AT1CS. “Senior Creditors” means (i) creditors of the Issuer (including holders of any security or other similar obligation issued, entered into or guaranteed by the Issuer that constitutes Tier II Capital Instruments) other than those whose claims rank or are expressed to rank, by its terms or by operation of law, pari passu or junior to the claims of the Securityholders; and (ii) any class of the Issuer’s share capital (excluding the most junior class of preference shares and ordinary shares).


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“Tier II Capital Instruments” means (i) any capital instrument issued by the Issuer or (ii) any other similar obligation issued by any subsidiary of the Issuer that is guaranteed by the Issuer that, in each case, constitutes Tier II capital of the Issuer on an unconsolidated or consolidated basis, pursuant to the relevant requirements set out in BNM Capital Adequacy Framework. “Winding-Up” means a final and effective order or resolution for the winding up, liquidation, dissolution or similar proceedings in respect of the Issuer.

(2) No Set-off : No Securityholder may exercise, claim or plead any right of set-off, deduction, withholding or retention in respect of any amount owed to it by the Issuer in respect of, or arising under or in connection with, the AT1CS, and each Securityholder shall, by virtue of his holding of any AT1CS, be deemed to have waived all such rights of set-off, deduction, withholding or retention against the Issuer in relation to the AT1CS to the fullest extent permitted by law. If at any time any Securityholder receives payment or benefit of any sum in respect of the AT1CS (including any benefit received pursuant to any such set-off, deduction, withholding or retention) other than in accordance with the terms of the AT1CS, the payment of such sum or receipt of such benefit shall, to the fullest extent permitted by law, be deemed void for all purposes and such Securityholder, by virtue of his holding of any AT1CS, shall, agree as a separate and independent obligation to immediately pay an amount equal to the amount of such sum or benefit so received to the Issuer (or, in the event of its winding-up or administration, the liquidator or, as appropriate, administrator of the Issuer) and, until such time as payment is made, shall hold such amount in trust for the Issuer (or the liquidator or, as appropriate, administrator of the Issuer) and accordingly any payment of such sum or receipt of such benefit shall be deemed not to have discharged any of the obligations under the AT1CS.

(3) Limitation on Payment

: The Issuer may, at its sole discretion and without prior notice to the Securityholders, taking into account its specific financial and solvency condition, elect to cancel any payment of Distribution, in whole or in part, on a non-cumulative basis. Any Distribution that has been cancelled shall be no longer due and payable at any


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time by the Issuer and shall not accrue, whether in a winding up situation or otherwise. Cancellation of a Distribution shall not constitute an Enforcement Event and does not entitle the Securityholders to petition for the insolvency or winding-up of the Issuer. If the Issuer does not make a Distribution payment on the relevant Distribution Payment Date (or if the Issuer elects to make a payment of a portion, but not all, of such Distribution payment), such non-payment or part-payment shall serve as evidence of the Issuer’s exercise of its discretion to cancel such Distribution payment (or the portion of such Distribution payment not paid), and accordingly such Distribution payment (or the portion thereof not paid) shall not be due and payable. If practicable, the Issuer shall provide notice of any cancellation of Distribution (in whole or in part) to the Securityholders on or prior to the relevant Distribution Payment Date. If practicable, the Issuer shall endeavour to provide such notice at least five (5) business days prior to the relevant Distribution Payment Date. Failure to provide such notice will not have any impact on the effectiveness of, or otherwise invalidate, any such cancellation of Distribution, or give the Securityholders any rights as a result of such failure.

(4) No Claim by Securityholders in respect of Distributions

: No Securityholder shall have any claim whatsoever in respect of any Distribution or part thereof cancelled and/or not due or payable as described under clause 2(v)(3) (Limitation on Payment). Accordingly, such cancelled Distribution or part thereof shall not accrue or accumulate for the benefit of the Securityholders or entitle the Securityholders to any claim in respect thereof against the Issuer.

(5) Distributable Reserves

: At any time, the amounts for the time being available to the Issuer for distribution as a dividend in compliance with section 365 of the Companies Act, 1965 as amended or modified from time to time, as of the date of the Issuer’s latest audited financial statements provided that if the Issuer reasonably believes that the available amounts as of any Distribution Determination Date (as defined below) are lower than the available amounts as of the date of the Issuer’s latest audited financial statements and are insufficient to pay the Distributions and for payments of any dividends or other distributions in respect of Parity Obligations on the


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relevant Distribution Payment Date, then two (2) directors of the Issuer shall provide a certificate, on or prior to such Distribution Determination Date, to the Securityholders of the available amounts as of such Distribution Determination Date (which certificate of the two (2) directors will be binding absent manifest error) and the “Distributable Reserves” as of such Distribution Determination Date for the purposes of such Distribution will mean the available amounts as set forth in such certificate. “Distribution Determination Date” means, with respect to any Distribution Payment Date, the day falling two (2) business days prior to that Distribution Payment Date. Any Distribution may only be paid out of Distributable Reserves.

(6) Distribution Stopper

: If, on any Distribution Payment Date, payment of Distributions scheduled to be made on such date is not made by reason of clause 2(v)(3) (Limitation on Payment), the Issuer shall not: (i) declare or pay, or permit any subsidiary of the

Issuer to declare or pay, any dividends or other distributions in respect of Junior Obligations (or contribute any moneys to a sinking fund for the payment of any dividends or other distributions in respect of any such Junior Obligations);

(ii) declare or pay, or permit any subsidiary of the

Issuer to declare or pay, any dividends or other distributions in respect of Parity Obligations the terms of which provide that the Issuer is not required to make payments of such dividends or other distributions in respect thereof (or contribute any moneys to a sinking fund for the payment of any dividends or other distributions in respect of any such Parity Obligations);

(iii) redeem, reduce, cancel, buy-back or acquire, or

permit any subsidiary of the Issuer to redeem, reduce, cancel, buy-back or acquire, any Junior Obligations (or contribute any moneys to a sinking fund for the redemption, capital reduction, buy-back or acquisition of any such Junior Obligations); or


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(iv) redeem, reduce, cancel, buy-back or acquire, or permit any subsidiary of the Issuer to redeem, reduce, cancel, buy-back or acquire, any Parity Obligations the terms of which provide that the Issuer is not required to redeem, reduce, cancel, buy-back or acquire such Parity Obligations (or contribute any moneys to a sinking fund for the redemption, capital reduction, buy-back or acquisition of any such Parity Obligations),

in each case, until (a) the next scheduled Distributions to be paid in respect of such number of consecutive Distribution Periods as shall be equal to or exceed twelve (12) calendar months have been paid in full (or an amount equivalent thereto has been paid, or irrevocably set aside in a separately designated trust account for payment to the Securityholders); or (b) the Issuer is permitted to do so by an extraordinary resolution of the Securityholders.

(7) Loss Absorption at the point of breach of CET1 Capital Ratio

: If the Common Equity Tier 1 (“CET1”) Capital Ratio of the Issuer (consolidated or entity level) falls below 5.125%, the Issuer shall, without the need for the consent of the Trustee or the Securityholders, write-off the AT1CS (in whole or in part). The aggregate amount to be written-off must be at least the amount required to restore the Issuer’s and consolidated Maybank Group’s CET1 Capital Ratio to at least 5.75%. If this is not possible, then the full principal value of the AT1CS will be written-off.

(8) Loss Absorption at the point of a Non-Viability Event

: If a Non-Viability Event (as defined below) occurs, the Issuer shall irrevocably, without the need for the consent of the Trustee or the Securityholders, write-off the AT1CS (in whole or in part), if so required by BNM and/or Malaysia Deposit Insurance Corporation (“PIDM”) at their full discretion. Upon the occurrence of a Non-Viability Event, the Issuer is required to give notice to the Securityholders (via the Trustee) and the rating agency in accordance with the terms of the AT1CS, then as of the relevant write-off date: (i) the write-off shall reduce:

(a) the claim of the AT1CS in liquidation. The Securityholders will be automatically deemed


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to irrevocably waive their right to receive, and no longer have any rights against the Issuer with respect to, any repayment of the aggregate principal amount of the AT1CS written-off;

(b) the amount re-paid when a call option is

exercised; and (c) AT1CS Distribution;

(ii) the write-off shall be permanent and the full or

part (as the case may be) of the principal amount of the AT1CS will automatically be written-off to zero and the whole or part (as the case may be) of the AT1CS will be cancelled; and

(iii) the write-off of the AT1CS shall not constitute an

event of default or trigger cross-default clauses. “Non-Viability Event” means the earlier of: (i) the Relevant Malaysian Authority (the “Relevant

Malaysian Authority” means BNM, jointly with PIDM) notifying the Issuer in writing that the Relevant Malaysian Authority is of the opinion that a write-off is necessary, without which the Issuer would become non-viable; and

(ii) the Relevant Malaysian Authority publicly

announces that a decision has been made by BNM, PIDM or any other federal or state government in Malaysia, to provide a capital injection, or equivalent support, to the Issuer without which the Issuer would have become non-viable.

(9) Contingent

Settlement : If on any Distribution Payment Date, a Capital

Disqualification Event (as defined below) of a tranche of AT1CS has occurred prior to or on such date and is continuing, the Issuer shall, in respect of such tranche, be obliged to pay the Distribution accrued and payable in respect of the distribution period which ended on that Distribution Payment Date and clause 2(v)(3) (Limitation on Payment) and clause 2(v)(5) (Distributable Reserves) shall cease to apply immediately thereafter.


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“Capital Disqualification Event” means that the whole (and not just a part) of any tranche of AT1CS no longer qualify for inclusion as Additional Tier 1 capital of the Issuer for the purposes of BNM’s capital adequacy requirements under any applicable regulations.

(10) No equity conversion

: The AT1CS shall not entitle the Securityholders to receive any form of equity interest in the Issuer at any point in time and the Issuer is not obliged to allot or issue any shares to or for the account of the Securityholders upon the occurrence of a Non-Viability Event or otherwise. The Securityholders shall not be entitled to participate in any distributions or entitlements to the Issuer’s shareholders or to attend or vote at any general meeting of the Issuer.

(11) Form and denomination

: For RM denominated issuances The AT1CS will be issued in registered form in the specified denomination of RM1,000 or multiples thereof. For non-RM denominated issuances Such form and in such denomination as shall be agreed upon by the Issuer and the Lead Manager.

(12) Trustee’s Reimbursement Account

: The Trustee shall open and maintain, throughout the tenure of the AT1CS Programme, an account to be named the “Trustee’s Reimbursement Account for Debenture holders’ Actions” (the “Account”) with a bank which is acceptable to the Issuer with a sum of Ringgit Malaysia Thirty Thousand (RM30,000.00), which amount is to be obtained from the proceeds of issuance of the AT1CS. The Account shall be operated solely by the Trustee and the money shall be used strictly by the trustee in carrying out its duties in relation to the declaration of an Enforcement Event in the manner as provided in the Trust Deed. The moneys in the Account may be invested in bank deposit or instrument or securities in the manner as provided in the Trust Deed, with profit from the investment to be accrue to the Issuer. The moneys in the Account shall be returned to the Issuer upon full redemption of the AT1CS Programme in the event there is no declaration of Enforcement Event.


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(13) Transaction Documents

: In respect of the AT1CS Programme shall include, but not be limited to, the following: (i) Programme Agreement; (ii) Trust Deed; and (iii) Any other relevant documents in the relevant

jurisdiction to be agreed between the parties that may be required to complete the issuance of RM denominated and/or non-RM denominated AT1CS as advised by the Solicitor and agreed by the Issuer.

(14) Taxation : All payments of principal and Distributions by or on

behalf of the Issuer in respect of the AT1CS shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within Malaysia or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law in which case the pricing supplement for the relevant tranche of the AT1CS will set out the Issuer’s obligations towards the Securityholders arising from such withholding or deduction.

(15)

Governing Law : For RM denominated issuances The AT1CS are governed by, and shall be construed in accordance with Malaysian law. For non-RM denominated issuances The laws of such relevant jurisdiction.

(16) Other Conditions : The AT1CS Programme shall at all times be governed by the guidelines issued and to be issued from time to time by the SC, BNM and where applicable, Malaysian Electronic Clearing Corporation Sdn Bhd (MyClear) over matters pertaining to the AT1CS Programme and the AT1CS.

(17) Voting by the Securityholders

: Voting by the Securityholders shall be carried out on a “per series” basis and not on a collective basis.