The Australian Prudential Regulation Authority (APRA) has released a letter to authorised deposit-taking institutions (ADIs), general insurers and life insurers (together ‘insurers’) to reinforce the existing prudential requirements for additional Tier 1 capital or Tier 2 capital instruments.
The letter sets out APRA’s expectations for ADIs and insurers seeking APRA’s approval to call and replace an outstanding Additional Tier 1 Capital or Tier 2 Capital instrument with one that has a higher credit spread or that is otherwise more expensive.
The letter to industry is available on the APRA website at: Expectations on capital calls.
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