La banque d'un monde qui change 2004 - BNP Paribas

Consolidated FInancial statementsNOTE 20 (CONT’D)SUBORDINATED DEBTUndated Subordinated DebtIn July 1984, pursuant to the French Law of 3 January 1983,BNP SA issued a first block of 1,800,000 undated participatingsubordinated notes (titres participatifs) with a face value ofFRF 1,000 for a total of EUR 274 million. Subscription rightsto new undated participating subordinated notes wereattached to each of these notes. In connection with rightsexercised in the period from 1985 to 1988, BNP SA issueda total of 412,761 new undated participating subordinatednotes with a face value of FRF 1,000. The notes were issuedat a total premium of EUR 4 million. The notes are redeemableonly in the event of liquidation of the Bank, but maybe retired in accordance with the terms of the law. Under thisoption 219,742 notes were retired in 2004 and subsequentlycancelled.In October 1985, BNP SA issued EUR 305 million of undatedfloating-rate subordinated notes (titres subordonnés à duréeindéterminée, or TSDI). The notes are redeemable only inthe event of liquidation of the Bank. They are subordinatedto all other debts of the Bank but senior to the undatedparticipating subordinated notes issued by BNP SA. The Boardof Directors is entitled to postpone interest payments if theshareholders’ meeting approving the financial statementsdeclares that there is no income available for distribution.In September 1986, BNP SA raised a further USD 500 millionby issuing new undated floating-rate subordinated noteswith characteristics similar to those of the French francnotes issued in 1985. In July 1986 and December 1996,Paribas SA issued undated subordinated notes in the amountsof USD 165 million and USD 200 million respectively.Between 1996 and 1998, BNP SA issued undated notes whichmay be called at the issuer’s discretion, starting from a datespecified in the issuing agreement and contingent uponthe consent of the Commission Bancaire.Undated participating subordinated notes, undatedsubordinated notes and undated notes qualify asTier 2 capital under French regulations and internationalguidelines on capital adequacy.NOTE 21RESERVE FOR GENERAL BANKING RISKSThe reserve for general banking risks amounted toEUR 752 million at 31 December 2004 (EUR 843 million at31 December 2003 and EUR 997 million at 31 December 2002).241BNP PARIBAS - ANNUAL REPORT 2004