Document ID: chunk:federal_register_of_legislation:F2024L01073:front:0:p17
Version: federal_register_of_legislation:F2024L01073
Segment Type: other
Provision Reference: 
Character Range: 44599–47605

in paragraph 41 of this Attachment, must not be included as corporate exposures.

General corporate – rated exposures
 1.          An ADI must apply the risk weights in Table 10 to its general corporate exposures with an external credit rating.

 1.         Risk weights for general corporate exposures
Credit rating grade (long-term)  1   2   3   4    5, 6
Risk weight (%)                  20  50  75  100  150

 1.          An ADI must apply the risk weights in Table 11 to short-term general corporate exposures with an issue-specific external credit rating.

 1.         Risk weights for general corporate exposures (short-term issue-specific credit ratings)
Credit rating grade (short-term)  1   2   3    4
Risk weight (%)                   20  50  100  150

 1.          If an ADI has a general corporate exposure with an issue-specific short-term external credit rating mapping to a credit rating grade of 4 under Table 11, then all unrated exposures to that counterparty, whether they are short-term or long-term exposures, must be risk-weighted at 150 per cent.

General corporate – unrated small- and medium-sized enterprise exposures
 1.          An exposure to an SME is an exposure to a corporate counterparty with total consolidated annual revenue of less than $75 million. Where an ADI has an exposure to an SME that is part of a corporate group, it may be treated as an SME exposure provided the total consolidated annual revenue for the group is less than $75 million. Where a corporate counterparty's total consolidated annual revenue cannot be determined, and the exposure is less than $5 million, the ADI may treat the exposure as SME.
 2.          An ADI must apply the risk weights in Table 12 to its unrated SME exposures.

 1.         Risk weights for unrated SME exposures
                Risk weight (%)
SME retail      75
SME corporate   85

 1.          To be risk-weighted as SME retail, the following criteria must be satisfied:
         1.           the exposure is in the form of a small business lending facility or commitment. Derivatives and other securities such as bonds and equities, and exposures secured by residential property are excluded from this category; and
         2.           the maximum aggregated exposure to the SME counterparty is less than $1.5 million. For this purpose:
                 1.             aggregated exposure means the gross amount, excluding the application of any credit risk mitigation. For off-balance sheet exposures, the gross amount must be calculated after applying CCFs; and
                 2.          the SME counterparty means either a single SME, or where the SME forms part of a corporate group, the broader group.

General corporate – other
 1.          For all other unrated general corporate exposures that are not treated as SME, an ADI must either:
         1.           assign a 100 per cent risk-weight to all exposures; or
         2.           assign an 85 per cent risk-weight to exposures to 'investment