Discounting of amount treated as Regulatory Capital.

The amount of outstanding Subordinated Debt that may be treated as Regulatory Capital shall reduce by 20 percent per annum of the initial aggregate principal amount of the applicable Subordinated Debt (as reduced by prepayments or amounts extinguished to cover a deficit under § 702.404(a)(6)), as required by the following schedule: Table 1 to § 720.407 Remaining maturity Balance treated as regulatory capital % Four to less than five years 80 Three to less than four years 60 Two to less than three years 40 One to less than two years 20 Less than one year 0