Back of Subordinated Note
4.300% Fixed Rate Reset Subordinated Notes due 2031
Capitalized terms used herein shall have the meanings assigned to them in the Subordinated Indenture referred to below unless otherwise indicated.
1. INTEREST. Citizens Financial Group, Inc., a Delaware corporation (the Company), promises to pay interest on the principal amount of this Subordinated Note at a rate per annum equal to (a) from February 11, 2021 to, but excluding, February 11, 2026 (the Reset Date), 4.300% and (b) from and including the Reset Date to, but excluding February 11, 2031 (the Maturity Date), the Five-Year U.S. Treasury Rate as of the day falling two Business Days prior to the Reset Date (the Reset Determination Date) plus 2.5%, in each case, computed on the basis of a 360-day year comprised of twelve 30-day months. The Company will pay interest on this Subordinated Note (i) semi-annually in arrears on February 11 and August 11 of each year (each, an Interest Payment Date) or, if any such day is not a Business Day, on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date to the Holder of record of this Subordinated Note on the 15th day preceding the applicable Interest Payment Date with respect to such Interest Payment Date (each, a Record Date). Interest on this Subordinated Note will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including February 11, 2021; provided that the first Interest Payment Date shall be August 11, 2021.
The Five-Year U.S. Treasury Rate means, as of the Reset Determination Date, (i) the average of the yields on actively traded U.S. Treasury securities adjusted to constant maturity, for five-year maturities, for the five Business Days appearing (or, if fewer than five Business Days appear, such number of Business Days appearing) under the caption Treasury Constant Maturities in the most recently published H.15 as of 5:00 p.m. (Eastern Time) (the Initial Base Rate) or (ii) if there are no such published yields on actively traded U.S. Treasury securities adjusted to constant maturity, for five-year maturities, then the rate will be determined by interpolation between the average of the yields on actively traded U.S. Treasury securities adjusted to constant maturity for two series of actively traded U.S. Treasury securities, (A) one maturing as close as possible to, but earlier than, the Maturity Date, and (B) the other maturing as close as possible to, but later than, the Maturity Date, in each case for the five business days appearing (or, if fewer than five business days appear, such number of business days appearing) in the H.15 as of 5:00 p.m. (Eastern Time).
Notwithstanding the foregoing, if the Company, in its sole discretion, determines on or prior to the Reset Determination Date that the Five-Year U.S. Treasury Rate cannot be determined in the manner described in the immediately preceding paragraph (a Benchmark Substitution Event), the Company may, in its sole discretion, designate an unaffiliated agent or advisor (the Designee), to determine whether there is an industry-accepted successor rate to the Initial Base Rate. If the Designee determines that there is such an industry-accepted successor rate, then the Five-Year U.S. Treasury Rate shall be such successor rate and, in that case, the Designee may then determine and adjust the business day convention, the definition of business day and the Reset Determination Date to be used and any other relevant methodology for determining or otherwise