Adjustments to Required Subordinated Percentage and Amount Clause Samples
The "Adjustments to Required Subordinated Percentage and Amount" clause defines how and when the minimum required levels of subordinated capital or investment in a transaction can be changed. Typically, this clause outlines the conditions under which the percentage or amount of subordinated funds—those that absorb losses before senior creditors—may be increased or decreased, such as in response to changes in risk profiles, regulatory requirements, or performance triggers. Its core function is to provide flexibility in maintaining appropriate risk buffers, ensuring the transaction remains compliant and financially stable as circumstances evolve.
Adjustments to Required Subordinated Percentage and Amount. (a) On any date, the Issuer may, at the direction of the Beneficiary, change the Required Subordinated Percentage of Class D Notes (Unencumbered) for the Class C(2020-3) Notes, without the consent of any Noteholders; provided that the Issuer has received written confirmation from each applicable Note Rating Agency that the change in such percentage will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes.
(b) On any date, the Issuer may, at the direction of the Beneficiary, replace all or a portion of the Required Subordinated Amount of Class D Notes for the Class C(2020-3) Notes with a different form of credit enhancement (including, without limitation, a cash collateral account, a letter of credit, a reserve account, a surety bond, an insurance policy or a collateral interest, or any combination thereof) and may add such definitions and other terms and make such additional amendments to this Terms Document as shall be necessary for such replacement without the consent of any Noteholders, provided that the Issuer has received written confirmation from each applicable Note Rating Agency that such replacement, such addition and such other amendments will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes.
Adjustments to Required Subordinated Percentage and Amount. (a) On any date, the Issuer shall, at the direction of the Beneficiary, change the Required Subordinated Percentage of Class D Notes (Unencumbered) for the Class C(2023-1) Notes, without the consent of any Noteholders; provided that the Issuer has received written confirmation from each applicable Note Rating Agency that the change in such percentage will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes.
(b) On any date, the Issuer shall, at the direction of the Beneficiary, replace all or a portion of the Required Subordinated Amount of Class D Notes for the Class C(2023-1) Notes with a different form of credit enhancement (including, without limitation, a cash collateral account, a letter of credit, a reserve account, a surety bond, an insurance policy or a collateral interest, or any combination thereof) and shall add such definitions and other terms and make such additional amendments to this Terms Document as shall be necessary for such replacement without the consent of any Noteholders, provided that the Issuer has received written confirmation from each applicable Note Rating Agency that such replacement, such addition and such other amendments will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes.
(c) If the Calculation Agent determines in good faith that based on its review of peer credit card issuers’ required enhancement levels, sponsor credit ratings, collateral performance and other market factors, that the current enhancement levels of the DiscoverSeries Notes materially exceed the level of such peer credit card issuers, the Calculation Agent will request confirmation from the Note Rating Agencies to facilitate a reduction in credit enhancement requirements under Section 2.07(a).