medium · Corporate Credit Analysis distressed

In a 'Single Point of Entry' (SPOE) resolution, what is the most likely outcome for these noteholders if the bank fails?

1. They rank pari passu with insured depositors and other senior claims at the operating subsidiary level.
2. They receive 100% recovery in full, as part of a direct government-backed bailout of the parent holding company.
3. The debt is accelerated and fully repaid from proceeds on the sale of the bank's headquarters building and its brand.
4. The debt is converted to equity to recapitalise the bank while operating subsidiaries continue to function.

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