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§ 3-312. Issuance and sale of debt instruments

West's Annotated Code of MarylandFinancial Institutions

West's Annotated Code of Maryland
Financial Institutions
Title 3. Banking Institutions--Commercial Banks
Subtitle 3. Capital Stock; Surplus Requirements; Stockholders (Refs & Annos)
MD Code, Financial Institutions, § 3-312
§ 3-312. Issuance and sale of debt instruments
Currentness
In general
(a) If the Commissioner approves, a commercial bank may issue and sell debt instruments that are repayable on the terms and bear the rate of interest, if any, stated in the instruments.
Impairment of capital stock
(b) The issuance of a debt instrument does not impair the capital stock of a commercial bank if the amount of the debt instrument is represented by cash or sound assets that exceed the impairment determined by the Commissioner.
Liability of holder of debt instrument
(c) The holder of a debt instrument is not subject to any liability imposed on stockholders under any law of this State.
Effect of liquidation
(d) In the event of liquidation, a debt instrument is:
(1) Subordinate to the claims of any depositor or creditor; and
(2) Preferred to the claim of any stockholder.
Voting rights
(e)(1) Each holder of a debt instrument has the voting rights that the charter provides and the Commissioner approves.
(2) A reference in this article to a required vote of the holders of the capital stock of a commercial bank includes holders of debt instruments to the extent that they are entitled to vote under this subsection.
Retirement or payment of debt instrument
(f) Before a commercial bank retires or pays any debt instrument:
(1) It shall obtain the approval of the Commissioner; and
(2) Any existing deficit in its capital, disregarding any debt instrument to be retired, shall be paid in cash so that the sound capital assets of the commercial bank are at least equal to its capital stock.

Credits

Added by Acts 1980, c. 33, § 2, eff. July 1, 1980. Amended by Acts 1996, c. 326, § 2, eff. July 1, 1996.
MD Code, Financial Institutions, § 3-312, MD FIN INST § 3-312
Current through legislation effective through May 9, 2024, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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