Decision (EU) 2019/1558 of the European Central Bank of 12 September 2019 amending Decision (EU) 2019/1311 on a third series of targeted longer-term refinancing operations (ECB/2019/28)

‘2 Each TLTRO-III shall mature three years after the respective settlement date, on a day that coincides with the settlement date of a Eurosystem main refinancing operation, in accordance with the indicative calendar for TLTROs-III published on the ECB's website.’

1 Subject to paragraph 2, the interest rate applicable to the amount borrowed under each TLTRO-III shall be the average rate on the main refinancing operation over the life of the respective TLTRO-III.

2 The interest rate applicable to the amounts borrowed by participants whose eligible net lending in the second reference period exceeds their benchmark net lending shall be lower than the rate specified in paragraph 1 and may be as low as the average rate on the deposit facility over the life of the respective TLTRO-III, depending on the deviation from the benchmark outstanding amount. The detailed provisions and calculations are outlined in Annex I. The interest rate shall be communicated to participants before the first early repayment date in September 2021 according to the indicative calendar for TLTROs-III published on the ECB's website.

3 The deviation from the benchmark outstanding amount, the resulting interest rate incentive adjustment, if any, and the final interest rates shall be communicated to participants in accordance with the indicative calendar for TLTROs-III published on the ECB's website.

4 Interest shall be settled in arrears on the maturity of each TLTRO-III, or on early repayment as provided for in Article 5a, as applicable.

5 If, due to the exercise of remedies available to an NCB in accordance with its contractual or regulatory arrangements, a participant is required to repay the TLTRO-III outstanding amounts before the deviation from the benchmark outstanding amount and the resulting interest rate incentive adjustment, if any, are communicated to that participant, the interest rate applicable to the amounts borrowed by that participant under each TLTRO-III shall be the average rate on the main refinancing operation over the life of the relevant TLTRO-III up to the date on which the repayment was required to be made by the NCB. If such repayment is required after the deviation from the benchmark outstanding amount and the resulting interest rate incentive adjustment, if any, have been communicated to the participant, the interest rate applicable to the amounts borrowed by that participant under each TLTRO-III shall be set taking into account the deviation from the benchmark outstanding amount.’;

1 Starting 24 months after the settlement of each TLTRO-III, participants shall, on a quarterly basis, have the option of terminating or reducing the amount of the TLTRO-III concerned before maturity.

2 Early repayment dates shall coincide with the settlement date of a Eurosystem main refinancing operation, as specified by the Eurosystem.

3 In order to benefit from the early repayment procedure, a participant shall notify the relevant NCB at least one week in advance of that early repayment date that it intends to repay under the early repayment procedure on the early repayment date.

4 The notification referred to in paragraph 3 shall become binding on the participant concerned one week before the early repayment date to which it refers. Failure by the participant to settle, in full or in part, the amount due under the early repayment procedure by the repayment date may result in the imposition of a financial penalty. The applicable financial penalty shall be calculated in accordance with Annex VII to Guideline (EU) 2015/510 (ECB/2014/60) and shall correspond to the financial penalty applied for failures to comply with the obligations to adequately collateralise and settle the amount the counterparty has been allotted as regards reverse transactions for monetary policy purposes. The imposition of a financial penalty shall be without prejudice to the NCB's right to exercise the remedies provided for on the occurrence of an event of default set out in Article 166 of Guideline (EU) 2015/510 (ECB/2014/60).’;

This Decision shall enter into force on 16 September 2019.