6. Loan Syndication Contracts - Part 2

This chapter contains the following sections:

6.1 Processing a Drawdown

You can process a drawdown contract in the ‘Drawdown Contract Online’ screen. TYou can invoke the ‘DrawDown Online’ screen by typing ‘LBDDDONL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

The screen is displayed with details of an existing drawdown contract, as shown below.

When you are capturing a new drawdown, Oracle FLEXCUBE validates the following:

You can capture a drawdown contract either by:

For more details, refer the heading ‘Entering the facility details’ in this chapter.

6.1.1 A description of the ‘Drawdown Contract Online’ Screen

You can capture the following in for a drawdown:

You capture information pertaining to the drawdown in the following tabs of the screen:

In addition, a vertical toolbar provided in the screen, may be used to invoke other sub-systems meant to capture important information for the drawdown.

These buttons are same as the ones available for the ‘LB Tranche Contract Online’ screen, except for the following:

‘Entity’

Click this tab to view/modify the entity details for the drawdown

‘Exrate Fixing

Click this tab to fix the exchange rate for a cross currency drawdown

‘Interest’

Click this tab to view the interest and margin components

Split Rollover

Click this tab to specify the spilt rollover details if applicable for the draw­down

‘Effective Inter­est Rate’

Click this tab to view the Effective Interest (EI) rates for the drawdown

‘Media Priority’

Click this tab to specify the media for message generation

 

6.2 Capturing Drawdown Details

To capture a new drawdown, click New from the menu.

The ‘Drawdown Type’ is displayed as ‘New’. The contract inherits the details of the template. Alternatively, you can also select the following details to capture a new drawdown:

Branch

Branch for which the drawdown is processed. You can process inter-branch contracts too.

 

Tranche Ref No

You have to select the reference number of the tranche under which you want to book a drawdown. The option list displays all active and authorized Tranche contracts. When you select the tranche, the system also displays the Tranche User Reference Number and the tranche borrower. In addition, the reference number of the borrower facility contract is also displayed.

Note

When you select a tranche, you have to ensure that all existing drawdowns under the tranche are authorized. If there are unauthorized drawdowns under the selected tranche, the system displays a message to indicate the same when you click the ‘Ok’ button. You are required to select another tranche or authorize the unauthorized drawdown (s) before you proceed.

Agent Ref No

The system displays the FpML Contract Identification number. However, you can modify it.

Borrower

By default, the borrower specified for the selected tranche is displayed here. You can specify a different borrower, if required. The option list displays all the borrowers specified for the tranche.

Drawdown Product

Select the drawdown product you want to use for the drawdown. The option list displays all the drawdown products associated with the tranche under which the drawdown is being processed. The following information defaults to the ‘DRAWDOWN’ tab of the screen (based on the preference defined for the underlying DD product and the tranche):

In the header section of the screen, you have to specify the following:

User Reference Number

The reference number is the identification that you specify for the borrower drawdown. You can specify any identification number. In addition to the Contract Reference Number generated by the system, this number is also be used to retrieve information about the drawdown.

By default, the Contract Reference Number generated by the system is considered to be the User Reference Number for the drawdown.

Custom Ref No

You can capture a unique reference number for the drawdown. This number is used to identify the drawdown in the system. You can also query the drawdown based on this number. The reference number can consist of a maximum of 16 alphanumeric characters.

6.2.1 Capturing Details in the ‘Drawdowns’ and Preferences Tab

You can change some of the default values for a drawdown. You can also capture additional information specific to a drawdown in the ‘Drawdowns’ tab of the screen.

The details that default and those that you can change are discussed below:

External CUSIP/ISIN

Internal and External CUSIP/ISIN is defaulted from the tranche for new drawdowns and cannot be changed at the drawdown level.

If there is a change in the External CUSIP at the tranche level, it gets propagated to the drawdowns for the tranche. The updated details for the drawdown are sent to Markit, a financial system that acts as an inventory for all agency activities, through FpML messages.

Refer the chapter ‘FpML Messaging’ for more details on the updation process

For more information on Internal and External CUSIP Number refer section ‘Capturing Contract Details’ in this chapter.

Currency

You have to select the currency for the drawdown. The option list displays the currencies allowed for the tranche. If the drawdown currency is different from the tranche currency, the system displays the following message:

Exchange Rate needs to be fixed!

The ‘Exchange Rate Fixing Date’ displays the current system date (booking date of the drawdown).

Note

If the drawdown currency is different from the tranche currency and the ‘Exchange Rate Code’ that defaults from the product is not maintained for the currency pair (tranche and drawdown currencies), the system displays an error message.

For more details on exchange rate fixing, refer the heading ‘Fixing exchange rate for the DD currency’ in this chapter.

Amount

Specify the amount being availed by the customer through the drawdown. This amount should be between the minimum and maximum DD amount specified at the tranche level. When you capture the amount, system displays its equivalent in the tranche currency (‘Amount in Tranche Ccy’ field). The sum of all drawdown amounts must not exceed that of the borrower tranche, total facility amount, and global LC sublimit at the tranche level.

Note

Example

In our first example of the facility contract with Mr. Robert Carr, the drawdown schedules requested by him for the first tranche were as follows:

Portion of loan desired in the first tranche: 50000 USD.

For each drawdown that you enter, you would specify the required amount as specified above.

PIK Margin

The PIK amount carried forward from the parent contract during rollover gets displayed here.

Unapplied Amount

The total uninitiated amount for an increase in drawdown principal for each value dated amendment is displayed here.

New Maturity Date

The unapplied maturity date for a value dated amendment is displayed here.

Drawdown Date

By default, the drawdown date is equal to the value date of the tranche. You can change the date to any date within the tranche period. In addition, the date should be later than the start date of the drawdown product. The date should be captured in ‘DD-MMM-YYYY’ format. The system displays an override if the specified drawdown falls on a holiday of the local currency. The system generates SWIFT messages to be sent to the participants before the drawdown date, intimating them to fulfill their commitment contracts.

Example

In our first example of the facility contract with Mr. Robert Carr, the drawdown schedules requested by him were as follows:

Portion of loan desired in the first tranche: 50000 USD.

Portion of loan desired in the second tranche: 50000 USD.

When you enter this schedule into the system, the drawdown dates you would specify are 30th January, 28th February, 31st March, 30th April, 31st May and 30th June.

Original Start Date

By default, the original start date of the tranche is applicable to the drawdown. You can specify a different date provided the new date is not earlier than the tranche original start date and not later than the tranche maturity date.

Maturity Date

By default, the tranche maturity date is applied. You can change the maturity date such that it is earlier than the tranche maturity date and less than or equal to the drawdown date. If the drawdown is completely paid ahead of the maturity date, then the maturity date is automatically be changed to the date of the drawdown paid.

DD Notice Date

This date is displayed based on the notification days maintained for the DD currency at the tranche level (in the ‘Currency Details’ screen). The notification date is arrived at using the notification holiday processing rules maintained for the tranche.

For details on maintaining notification days and holiday processing rules, refer the heading ‘Specifying currency details for the tranche’ in this chapter.

In case of current dated or back dated drawdowns, the booking date gets defaulted here. You can change the date beyond the booking date but less than or equal to the value date (if the value date and booking date are different). The system displays an override if the notification date is less than the current application date.

Int Rate Fixing Date

The interest fixing date for the DD currency is displayed based on the ‘Interest rate fixing days’ defined for the tranche and the list of holiday currencies maintained for each currency allowed for the tranche.

The interest rate fixing date is the date (prior to the drawdown date) as of which the interest rate is fixed for a new drawdown or for the new rate fix period. If you change the drawdown currency or the drawdown date, the system re-computes the interest rate fixing date and displays the same here.

Exch Rate Fixing Date

Similarly, the exchange rate fixing date for the drawdown currency is displayed based on the ‘Exchange rate fixing days’ defined for the tranche and the list of holiday currencies maintained for each currency allowed for the tranche. Exchange rate fixing for the new drawdown or the new rate fix period is done on this day.

For details on maintaining exchange rate and interest fixing days and holiday processing rules, refer the heading ‘Specifying currency details for the tranche’ in this chapter.

Special Amount

Specify the special amount disbursal, if any.

Note

Industry Code

Specify the industry code. The adjoining option list displays all industry codes maintained in the system. You can choose the appropriate one.

Global DD Amount

The Global Drawdown amount is computed and populated during new drawdown booking based on the Tranche, Global Tranche, and Drawdown amounts. The Global Drawdown Amount is computed as follows:

Global Drawdown Amount = (Global Tranche Amount / Tranche Amount) * Drawdown Amount.

You can amend this amount only for non-lead drawdowns and only if the corresponding Tranche has ‘Cascade Participation’ set to ‘No’. You cannot amend this amount if the underlying Tranche has ‘Cascade Participation’ set to ‘Yes’. The latest Global Amount as on the date of handoff is used for handoff of the Commitment Reduction to the Loans QT system.

However, only those Drawdown Global Amounts, with cascade participation set to N, can be amended using the new screen Global Amount Update/Amendment screen.

Note

The Global Drawdown amount cannot be updated during drawdown amendments.

Drawdown Type

This indicates whether you are defining a new drawdown or renewing an existing drawdown. For a new drawdown, ‘New’ is displayed and you cannot change it.

Renewal Type

The ‘Rollover Method’ you specify for the drawdown product will default here. You can change it at the drawdown level. Specify the manner in which the drawdown should be renewed/rolled over. The options available are:

Note

Irrespective of the type of renewal you select here, the system allows you to capture in­structions for any one of the renewal types mentioned above. Depending on the type of instructions you capture, the system automatically updates the ‘Renewal Type’ with the lat­est value when you save the instructions.

Split Message Type

You can select this message type only if the ‘Renewal Type’ is specified as ‘Split’. The message types available are:

INIT Mode

This specification defaults from the tranche. You can change it for the drawdown, if required. This will indicate the mode of initiating the drawdown in the system. The following options are available:

For more details on this screen, refer the heading ‘Specifying participant details for the tranche’ in this chapter.

Suppress B.V Fixing Advice

You can check this option to stop the generation of payment messages when back valued schedules for a back-dated drawdown (with initiation date before today’s date) is liquidated.

Ancillary Drawdown

Oracle FLEXCUBE allows you to process Ancillary drawdowns under a tranche. Check this option to indicate that you want to process an Ancillary Drawdown.

This check box is enabled under the following conditions:

A pro-rata tranche is converted to a ‘Non-Cascade’ type once you save the drawdown and it remains as Non-Cascade even on repayment of the drawdown. You can send out participant FFT messages to all the lenders in the syndicate in case of ancillary drawdowns and amendments of the same. You need to maintain a separate advice template for this which you can choose in the FFT screen.

Note

Swing Line Drawdown

You can check this option while booking the new drawdown to identify a swing line drawdown. You cannot make any changes to this during the amendments of the drawdown at the contract level.

For more information on swing line refer to Loan Syndication – An Overview chapter.

Note

If you process a swing line drawdown under a tranche for which the ‘Cascade Participa­tion’ option is checked, the system automatically converts the tranche into a non-cascade participation type.

Further, it triggers the event ‘CASC’ to indicate this conversion.

Bidding Contract

You can select this check box to specify whether the contract is of competitive bidding type.

Note

You can process a bidding contract under tranches for which the ‘Cascade Participation’ option is not checked.

Sighting Funds Applicable

The value for this field is defaulted from the corresponding tranche and you are not allowed to modify this value.

Note

 

Liqd Interest on Prepayment

Select this check box to indicate if interest should be liquidated as part of prepayment. This check box is enabled only for Prime contracts.

In other words, you can liquidate an interest component for a contract on prepayment, only if you have selected this check box and also the ‘Prime Loan’ check box for a product in the ‘Loan Syndication – Borrower Product Preferences’ screen.

If this check box is selected, Oracle FLEXCUBE allows you to define only a bullet interest schedule. Otherwise, you can define a frequency-based schedule.

Note

FpML Type

Select this check box to indicate that the FpML type is required for the DrawDown contract.

If you have selected this box, the system does the following:

If you have not selected this check box and the ‘Media Priority’ option is selected at the product level, then ‘Media Priority’ tab is enabled.

For more information, refer the section ‘Specifying Media for Message Generation’ in this chapter.

Partial Prepayment Allowed

Select this check box to indicate that for drawdown products, partial prepayment is allowed.

Note

Partial prepayment is allowed only for drawdown products where,

LC Type

This specification defaults from the product. You may change it at the contract level, if required. The available types are:

Note

You can select the type of LC only if the ‘LC Drawdown’ option is checked for the draw­down.

If you check the ‘LC Drawdown’ option for the product, the same defaults to all drawdowns and you cannot amend it at the drawdown level.

LC Issuer

If the drawdown is an LC type of drawdown, you have to select the issuer of the LC as mandatory information. The option list displays the names of participants you have identified as issuers of LC. This is done at the tranche level.

The LC Issuance Fees is paid to the participant who is identified as the issuer of LC. This fee is computed on the outstanding amount of all the LC drawdowns for the selected issuer.

For more details on this, refer the heading titled ‘Identifying participants as issuers of LC’ in this chapter.

Int/Fee Distribution

System displays the method in which the interest and fee components are distributed among the participants when an assignment is executed before the liquidation date. The distribution type is classified into - ’Lender of Actuals’ type and ’Lender of Record’ type.

This is defaulted from the tranche level.

SSI Pickup At

This option defaults from the tranche. You can opt for a different value for the drawdown, if required. This indicates the basis for picking up the SSI (Standard Settlement Instructions) Mnemonic for the drawdown.

The available options are:

For more details on this screen, refer the heading ‘Specifying drawdown participant details’ in this chapter.

Billing Notice Days

This defaults from the drawdown product. You can change default value, if required.

This indicates the number of working days before the repayment due date when a billing notice should be generated, to be sent to a customer as a reminder of the payment.

PIK Rollover with capitalization

Select this check box to indicate that the PIK rollover with capitalization is allowed for the contract. You can amend this value after the Rollover is removed\reversed. You cannot amend the value if the interest component linked to Tranche PIK margin component is having non- zero rate.

Interest Payment Propagation

Select the interest payment for the drawdown from the below two options:

Cash payment can be processed as part of manual payment, split rollover and consolidated rollover processing. The field value for the child contract gets defaulted from parent contract during split rollover processing. During consol rollover processing, the value gets defaulted to child contract from the driver contract.

You cannot book drawdown booking with ‘Interest Payment Propagation’ as ‘Cash’ if below mentioned existing flags are checked for drawdown contract

You cannot book drawdown under lead tranche with ‘Interest Payment Propagation’ as ‘Cash’.

After the drawdown is authorized, amendment of interest payment propagation is allowed under the below validations:

For the drawdowns under lead tranches, the value is ‘Normal’ always. All the existing lead and non lead tranches, the ‘Interest Payment Propagation’ gets updated as ‘Normal’.

Named Agent

System defaults the value of the named agent maintained in the tranche contract online screen, while booking a new drawdown, in this field.

System also displays the name of the named agent adjacent to the Named Agent field.

Agreement/Administrator/Internal Remarks

These details gets default from the tranche contract and may be changed at the drawdown level.

6.2.2 Capturing Details in the ‘Contract’ Tab

You can capture the other contract details in the ‘Contract’ tab of the screen.

 

The following contract details applicable for drawdowns are explained below:

Liquidation

Mode of liquidation of interest and fee components associated with the drawdown defaults from the drawdown product.

At the drawdown level, you can change the mode to any one of the following methods:

For more details on ‘Contract Payment’ screen, refer the heading ‘Processing Repayments Manually’ in the ‘Processing Repayments’ chapter of this User Manual.

For more details on ‘Fee Liquidation’ screen, refer the heading ‘Liquidating Fee Components’ in the ‘Processing Charges and Fees’ chapter of this User Manual.

For more details on this screen, refer the heading ‘Forward processing of events’ in this chapter.

Status Control

The statuses - for example, Active, Past Due Obligation, Non-Accrual Basis, and Write-Off , and so on. defined for the product in the ‘Status Maintenance’ screen is applicable for the drawdown. You have to indicate the mode of status change for a drawdown.

The options are:

For details on the ‘Status Maintenance’ screen, refer the heading titled ‘Maintaining status rules for a syndication product’ in the ‘Reference Information for Loan Syndication’ chapter of this User Manual.

Limit Line

When you are entering a borrower drawdown, specify the credit line under which exposure would be tracked, if required. The credit lines selected for the drawdown customer (borrower) is displayed in the option list provided.

Amortization Type

You need to specify the amortization applicable to the drawdown only if the schedule type is ‘Amortized’. The following options are available:

Examples:

Case 1: Reducing balance

Assume that you have disbursed a drawdown with the following details:

Based on the reducing balance method, the interest, principal and the EMI is as follows:

Sl. No

Interest

Principal

EMI

Outstanding Bal

1

86.11

$793.05

$879.16

$9,206.95

2

79.28

$799.88

$879.16

$8,407.07

3

65.39

$813.77

$879.16

$7,593.30

4

65.39

$813.77

$879.16

$6,779.53

5

56.50

$822.66

$879.16

$5,956.88

6

51.30

$827.86

$879.16

$5,129.02

7

42.74

$836.42

$879.16

$4,292.60

8

36.96

$842.20

$879.16

$3,450.40

9

29.71

$849.45

$879.16

$2,600.95

10

21.67

$857.49

$879.16

$1,743.46

11

15.01

$864.15

$879.16

$879.31

12

6.11

$873.05

$879.16

$6.26

 

The interest for the first schedule is computed on the loan principal (10,000) for the first month (31 days) using the following formula:

(10000 * 10 * 31) / (100*360)

Interest for the subsequent schedules are computed on the outstanding principal for each schedule.

Case 2: Rule of 78

Consider the drawdown details mentioned in case 1.

Total interest on the loan = (10000 * 10 * 364) / (100*360) = 1011.11

Interest for each schedule = 1011.11/12 = 84.26

Principal for each schedule = 10000/12 = 833.33

EMI = 833.33 + 84.26 = 917.59

First month’s interest = 12/78 times $1011.11 = 155.56

(78 is the sum of integers from 1 to 12)

Therefore, principal for the first month = 917.59 – 155.56 = 762.03. The interest, principal, and EMI due for each schedule is as follows:

Sl. No

Interest

Principal

EMI

1

155.56

762.03

917.59

2

142.59

775.00

917.59

3

129.63

787.96

917.59

4

116.67

800.92

917.59

5

103.70

813.89

917.59

6

90.74

826.85

917.59

7

77.78

839.81

917.59

8

64.81

852.78

917.59

9

51.85

865.74

917.59

10

38.89

878.70

917.59

11

25.93

891.66

917.59

12

12.96

904.63

917.59

Total

1011.11

9999.97

11011.08

 

User Defined Status

If you have not checked the ‘Schedule Level’ status processing for the drawdown product (as part of product preferences), you have to specify the drawdown status here. For a new drawdown, the default status is ‘NORM’ (Normal). You cannot change the status of any of the schedules in this case. You can select from a list of user-defined statuses maintained for the drawdown product (in the ‘Status Maintenance’ screen).

If you have defined schedule-level status processing for the drawdown product, you cannot change the status of the contract in this field. You can change the status of any of the schedules, as required, and the status of the contract is determined as the worst status among the individual statuses of the schedules.

6.2.2.1 Specifying Holiday Treatment for Maturity/Value Date of the Drawdown

In this section of the screen, you can specify the holiday treatment preferences for value date and maturity date falling due on holidays defined for the branch. The holiday treatment details maintained for the drawdown product defaults to the drawdown. You can change your preferences for the drawdown.

For more details on the options available, refer the heading ‘Specifying Additional Preferences for Loan Syndication’ in the ‘Defining Products for Loan Syndication’ chapter of this User Manual.

6.2.2.2 Viewing the Agency Type

The agency type of the transaction (Lead or participation) is defaulted from LB Tranche Contract Online and you are not allowed to change it during Drawdown contract booking or Amendment.

6.2.2.3 Specifying ‘Other’ Details

Following details have to be captured in the ‘Other Details’ section of the screen:

Verify Funds

When the system debits the borrower’s repayment account for liquidation (repayment), you can specify that the availability of funds for liquidation of the various components of the drawdown has to be ascertained before liquidation is done.

Check this option if you want the availability of funds to be checked before automatic liquidation is done. By default, this option is selected.

Liquidate Back Valued Schedules

If you have specified, while defining the product, that for a back-dated tranche or drawdown loan contract (which has an initiation date which falls before today’s date), with schedules prior to today’s date, the schedules have to be liquidated when the drawdown is initiated, the same will apply to the drawdown you are processing. However, through this field, you can choose not to liquidate back valued schedules by leaving this field blank.

6.2.2.4 Specifying Loan Statement Details

The following loan statement details may be maintained:

Statement Type

You can specify if a loan statement needs to be generated for the drawdown. If loan statements are to be generated, you can specify the type of statement you want to generate. The options are:

If you do not want to generate loan statement, select the ‘None’ option.

Cycle/On

If loan statements have to be generated for the drawdown, you have to indicate the frequency of statement generation. You can set the frequency to any one of the following options:

Based on the frequency that you specify, you can also indicate the month/weekday for the generation of the statement. Thus, if you have set the loan statement generation frequency to Annual, Semi-Annual, or Quarterly, you have to indicate the month in which the first statement is to be generated.

Similarly, if you have indicated that statement generation is to be on a fortnightly or weekly basis, you should specify the day of the week on which the statement is to be generated. For instance, if you indicate that a weekly generation should be done on Thursday, the statement is generated every week on Thursdays.

When the frequency is set to monthly, then by default, the statement is generated on the last day of every month. You can also select a different day from the drop-down menu.

6.2.2.5 Specifying Rollover Details

The rollover applicability is explained below:

Rollover (Yes/No)

While setting up the drawdown product, if you specified that drawdowns involving the product should be automatically rolled-over, then all drawdowns involving the product is rolled-over on their respective maturity dates. This feature is called auto rollover. If rollover is specified for the product, the same is applicable for the drawdowns.

If you do not want to rollover the drawdown, you can select the ‘No’ option. However, if rollover is not allowed for the product, you cannot opt for rollover at the drawdown level.

Note

This option is set to ‘No’ and is disabled if the option ‘Partial Prepayment Allowed’ has been selected.

Count

If rollover is applicable for the drawdown, the system displays the rollover count in this field. For a drawdown that has been rolled-over, this count indicates the number of times it has been rolled-over.

6.2.2.6 Specifying the Rounding Details

The drawdown contract inherits the currency-wise rounding rules defined for interest components, in the interest class associated with the drawdown product (as defined in the ‘Interest Class Definition’ screen).

Int Period Basis

This field indicates how the system must consider the tenor basis upon which interest is computed over a schedule or interest period. You can select the required option from the drop down list.

Rounding Rule

Indicate the currency rounding rule that must be applied to round off interest amounts in the selected currency, for the main interest component. The following options are available in the drop down list:

Decimals

This indicates the number of digits after the decimal place, to which interest amount in the specified currency, is to be truncated. This specification can only be made for the rounding option ‘Truncate’. If you do not specify a value here, the system uses the number of decimals defined for the drawdown currency (in the ‘Currency Definition’ screen).

The number of decimals specified in this field cannot exceed the number of allowed decimal places defined for the specified currency (in the ‘Currency Definition’ screen).

Units

This field indicates the lowest possible measure in which interest amounts can be considered in the specified drawdown currency. This value cannot be less than the rounding unit for the specified currency (as maintained in the ‘Currency Definition’ screen). If not specified, the system picks up the rounding unit maintained for the drawdown currency.The following details default to screen and you cannot change them:

For more details on the ‘Currency Definition’ screen, refer the ‘Currency Maintenance’ chapter of the CS (Core Services) User Manual.

6.2.2.7 Specifying Revaluation Preferences

If Reval Reqd is ‘Yes’ for the drawdown product, the same defaults to the drawdown processed with the product. You can, however, change the preferences for a specific drawdown. But, if ‘Reval Reqd’ is ‘No’ for the product, you cannot change it to ‘Yes’ at the drawdown level and revaluation will not be applicable for such drawdowns. The following preferences become mandatory if revaluation is applicable:

Exchange Rate Code

This indicates the code for the exchange rate that must be used to convert the drawdown amount from the drawdown currency to its equivalent in the tranche currency. The option list will display the rates codes maintained for the currency pair (tranche and drawdown currencies) involved in the conversion. During revaluation, system picks up the exchange rate maintained for the selected rate code and rate type corresponding to the currency pair.

Exchange Rate Type

This refers to the type of exchange rate that must be used to convert the drawdown amount from the drawdown currency to the tranche currency. The available options are:

Frequency

This is the frequency or periodicity at which automatic revaluation should be performed. The options available are:

Start Month and Start Day

For the frequency selected, you must also specify the month and the date according to which the system commences the revaluation process.

6.2.2.8 Viewing Revaluation Schedules

If Reval Reqd is ‘Yes’, Oracle FLEXCUBE creates the revaluation schedules based on the Frequency, Start Month and Start Day you specify as part of the revaluation preferences for the drawdown. The system also takes into account the holiday preferences in the ‘Holiday Treatment for Schedule’ section of the ‘SCHEDULE’ tab to arrive at the schedule dates.

The following ‘Contract Details’ are displayed in this screen:

The following ‘Revaluation Schedules’ details are displayed in the Contract tab for each schedule:

Note

For more details on revaluation, refer the heading titled ‘Processing revaluation of drawdowns’ in this chapter.

6.2.3 Capturing Details in the Schedule tab

You can capture the details pertaining to the drawdown schedule in the ‘SCEHDULE’ tab.

 

The information available in this screen is discussed below:

6.2.3.1 Specifying Holiday Treatment for Schedules

The holiday treatment you specified for the DD product defaults to the drawdown. However, you can change the details, if required.

Note

The system redefines the future schedule dates for Principal, Fees, and Interest compo­nents based on the changes made.

For details on the available options, refer the heading ‘Specifying Additional Preferences for Loan Syndication’ in the ‘Defining Products for Loan Syndication’ chapter of this User Manual.

6.2.3.2 Processing Rules

Grace Days

For drawdown contract, system defaults the value maintained for ‘Grace Days’ at the borrower drawdown product level. However, you can edit the default value of grace days during contract input or contract amendment. During contract amendment, the amended value is applicable only to future calculations of late payment charges. While saving the drawdown, system displays the following override message:

‘Grace Days for drawdown is defaulted from the tranche contract, do you wish to continue?’

You can accept the override message by clicking the ‘Ok’ button to continue with the save process. In this case, system defaults the value for grace days from linked borrower tranche contract. If you reject the override, then system defaults the value of ‘Grace Days’ from the drawdown product.

6.2.3.3 Specifying Repayment Schedule Details

The repayment schedule definition for the drawdown is based on the repayment processing rule specified at the tranche level. The available rules are:

For more information on the above rules, refer the heading ‘Specifying processing rules for the tranche’ in this chapter.

Further, it also depends on the ‘Auto Repay Schedule’ option defined for the tranche (in the ‘Schedule’ tab of the ‘LB Tranche Contract Online’ screen).

Note

The drawdown repayment schedules are determined by the reduction schedules only for drawdowns with the following attributes which are defined as part of drawdown product preferences.

The repayment schedule details include the following:

Type

In the ‘Schedule Details’ section of the screen, you can define the following types of schedules:

Component

In this field, you have to specify the component for which the schedule is being defined. All components - the principal and other components, depending upon your association with the drawdown product will be available in the form of an option list. You have to define schedules for each of them.

When defining repayment schedules for specific loans, the amount of repayment needs to be specified only for the principal. The interest, commission and fee amounts are calculated by the system, automatically, depending on the repayment date and amount of the principal.

Note

For amortized schedules, you cannot define schedules for the principal. The component is displayed as ‘AMORTISE’. You should specify the frequency of amortization.

Start Date

This is the date on which the first repayment or rate revision becomes due for the schedule being defined. Subsequent dates will be calculated based on this date and the frequency you specify in the next field. Any repayment or rate revision schedule date falling on a holiday is handled as per the holiday treatment specifications you define.

This date should be the same or later than the Value Date and same or earlier than the Maturity Date of the drawdown.

No.

Based on the frequency and the unit of frequency, you have to specify the number of schedules for the component. For instance, if you want the schedules to fall due once a month for 12 months, then you need to specify the following details:

Frequency

This indicates the frequency/interval at which the schedules fall due. The available frequencies are:

Note

You can specify only bullet schedule for PIK interest component. PIK margin maintained at the ‘Margin Maintenance’ screen is automatically picked up for the PIK margin compo­nent.

Unit

Unit of frequency identifies the number of occurrences within a frequency, for example, . Unit ‘2’ and Frequency ‘Monthly’ means bimonthly frequency that is, the schedule occurs once in 2 months. Similarly, if you want a payment every 15 days you have to specify the frequency as ‘Daily’ and enter the units as ‘15’.

Amount

When defining repayment schedules, the amount of repayment needs to be specified only for the principal. This is the amount by which the available amount under the drawdown is reduced as per the frequency.

The system calculates the interest and fee amounts automatically, depending on the repayment date and amount of the principal. However, for drawdowns with special interest, you also have to provide the interest amount. Similarly, if a fee or a charge has been defined as an amount, you also have to specify the amount.

Note

6.2.3.4 Specifying the Amortize Details

You can specify the following details related to amortize contracts

Installment Amount

Specify the installment amount for amortized contracts. This option is available only for the contract using the product which has the ‘Allow user input installment’ flag is checked.

The system performs the following validations to this field:

Installment amount captured is same for all schedules and it may differ if:

Principal is derived as Principal = user input installment– Interest component. Allow

Pre-Amortization Interest

Select this check box to indicate that the system should calculate the pre-amortization interest.

6.2.3.5 Viewing Drawdown Payment Schedule Details

Based on the payment schedules captured for the components, Oracle FLEXCUBE computes the schedules and the amount payable for each schedule in the ‘Payment Schedule Details’ screen.

Click ‘Payment Details’ button from the ‘Schedule’ tab

6.2.3.6 Viewing Drawdown Revision Schedule Details

To view the rate revision schedules, click the ‘Revision Schedule’ button. The ‘Revision Schedule Details’ screen appears.

 

The following details are displayed in this screen:

6.2.3.7 Viewing Rate History Details

You can view the Interest rate and margin rate history for each drawdown in the ‘Rates History’ screen. This screen holds the history of interest rate and margin changes that have happened for the drawdown. Click ‘Rate History’ tab to invoke this screen.

 

In this screen, you have to select the interest component to view the corresponding interest and margin details. To view the margin rates for the components, click the ‘Margin History.

 

6.2.3.8 Viewing Linkage Details for the Drawdown

In the ‘Linkage Details’ section of the screen, you can view the details of the tranche under which the drawdown is processed. The following details are displayed here:

 

6.2.3.9 Schedule Adjustments on Interest Rate Revision

In the Instance of Rate change, differential amount will be adjusted against the Bullet schedule without modifying the existing Installment constant amount. On ‘REVN’ or ‘VAMI’ either increase or decrease in the rate increases or decreases the bullet schedule amount without affecting EMI or Tenor. As a result, the EMI of the bullet schedule can be less or more than the other schedules.

The main interest component amount of each installment is re-computed in usual way based on the principal balance and the new rate. The prevailing EMI (EMI present in the current schedule of the transaction – System doesnot consider EMIs of previous schedules) will be kept constant.

The iteration of reducing Principal balance with above Principal component of EMI continues until the bullet schedule is reached. The last EMI have the remaining Principal amount and the interest as the EMI.

In case of user input installment amortise schedule type contracts, On Rate revision or Margin Rate Fixing, if the sum of Interest and Special Component’s amount exceeds the existing Amortization amount, exception is logged for those contracts in batch.

6.2.3.10 Schedule Adjustments on Prepayment

The following schedule adjustments are performed for prepayment:

Note

‘Liqd int on prepaid principal’ flag is not applicable for any kind of payment of amortization contracts. Payment value date should fall on a schedule date of the Interest (AMORTISE component in case of Amortise schedule type Drawdowns) to do full prepayment of the contract.

6.2.4 Capturing Details in the ‘Split Rollover’ Tab

You can rollover a drawdown only if you have checked the ‘Allow Rollover’ option for the drawdown product used to process the drawdown. If this option is not selected, the following message is displayed when you attempt to visit the ‘ROLLOVER’ tab:

Rollover not allowed

For details on rollover and information on the ‘ROLLOVER’ tab, refer the ‘Rolling-over a drawdown’ chapter of this User Manual.

6.2.5 Specifying Drawdown Entity Details

You can view the borrower entity details in the ‘Borrower Entities’ screen. These details default from the tranche associated with the drawdown. Click the ‘Entity’ tab to invoke this screen.

 

You can modify only the following parameters:

SSI Counterparty

By default, the drawdown borrower is displayed here. You can change the counterparty if the borrower requests to process the settlements through another account. The option list displays the names of all the customers maintained in Oracle FLEXCUBE.

SSI Mnemonic

SSI Mnemonics are maintained in the ‘Settlement Instructions’ screen for a Counterparty, Module, Currency, Product and Branch combination. The same is available for the counterparty/borrower of the drawdown. The Mnemonic selected here obtains the settlement details for the borrower of the contract and the same defaults to the ‘Settlement Message Details’ screen.

If you do not select the SSI Mnemonic, system defaults the SSI Mnemonic for the counterparty and contract currency when you exit the screen.

Note

Note the following:

Select the appropriate ssi mnemonic applicable for the selected currency

6.2.6 Specifying Drawdown Participants

You must also identify the participants who contribute to the amount being disbursed under the drawdown. A borrower drawdown contract inherits the participant details defined for the borrower tranche under which it is entered. You can make changes to the defaulted participant details when you enter a borrower drawdown. To view the details in the ‘Participant Ratio Details’ screen, you have to click the ‘Participants’ tab.

Based on the drawdown amount, the system computes the contribution of each participant towards the drawdown as per the ‘Asset Ratio’ maintained for the tranche.

You can change the default participant details in this screen. Upon change of participants, the system automatically convert a ‘Cascade Participation’ type of tranche to a ‘Non Cascade Participation’ type. The ‘CASC’ event is triggered to indicate the change in the attribute and the ‘Cascade Participation’ option for the underlying tranche (in the ‘CONTRACT’ tab of the ‘LS Tranche Contract Online’ screen) is deselected. If changing the participant details is possible, you can specify the following details for each participant, for the drawdown schedule:

For example, let us assume a tranche amount of USD 10 million. The Asset Sharing Ratio (ASR) for various participants can be calculated as follows:

Participant

Asset amount in USD

ASR in %

CITIBANK

2,000,000

20

BAR­CLAYS

2,000,000

20

NATWEST

3,000,000

30

HSBC

3,000,000

30

 

At the drawdown level, you can choose to change the asset sharing ratio of the participants in the following manner, if required.

Let us assume that the first drawdown amount is USD 4 million. The Asset Sharing Ratio (ASR) for this amount is as follows:

Participant

Asset amount in USD

ASR in %

CITIBANK

1,200,000

30

BAR­CLAYS

400,000

10

NATWEST

1,600,000

40

HSBC

800,000

20

 

When you change the ASR for a drawdown under the tranche, the ASR at the tranche level will remain the same. However, at the time of a second drawdown, the ASR at the drawdown level displays the availability ratio instead of the tranche asset sharing ratio.

Note

The original asset sharing ratio is displayed only at the Tranche level.

The availability ratio after the first drawdown is as follows:

Participant

Asset amount in USD

ASR in %

Availability amount

Availability ratio in %

CITIBANK

2,000,000

20

800,000

13.33

BAR­CLAYS

2,000,000

20

1,600,000

26.67

NATWEST

3,000,000

30

1,400,000

23.33

HSBC

3,000,000

30

2,200,000

36.67

 

The availability amount is computed on the following basis:

 

The availability amount could vary for revolving and non-revolving tranche.

For revolving tranche contracts, the available amount will be calculated as follows:

 

For non-revolving tranche contracts, you can compute the available amount in the following manner:

 

You can change the asset sharing ratio for participants on a non proportionate basis using the ‘Contract Payment’ screen.

For more information on this, refer the section ‘Processing Repayments Manually’ in the ‘Processing Repayments’ chapter of this User Manual.

For details on fields available in this screen, refer the heading ‘Maintaining participant details for the tranche’ in this chapter.

In addition to the above, you can do the following through this screen:

For details on the above procedures, refer the following headings in this chapter:

6.2.7 Viewing Participant Margin Details

You can view margin details maintained for participants of the drawdown contract, using the ‘Participant Rate Summary’ screen. To view this screen, you have to click the ‘Part Rate’ tab.

 

Here you can view the following details.

Participant Details

The system displays the following participant details:

Interest Components

The system displays the following component details.

Interest Details

The system displays the following interest details.

Margin Details

The system displays the following margin details.

6.2.7.1 Viewing Margin History

You can view margin details of all participants including the margin history by clicking the ‘Margin History’ button on the ‘Participant Rate Summary’ screen.

The system displays the following details.

Participant Details

The system displays the following participant details:

Margin History Interest Component

The system displays the following component details.

Margin Details

The system displays the following margin details.

Margin Rates

The system displays the following margin rate details.

The margin rate maintained for the individual participant is considered while calculating the interest due on the participant side, during contract booking. This is applicable for current dated/back dated/forward dated drawdown bookings.

6.2.8 Fixing Exchange Rate for Drawdown Currency

You will need to fix the exchange rate for drawdowns only if the drawdown currency is different from the tranche currency. The exchange rate fixing days refers to the number of business days before the value date of the drawdown or the new rate fix period. Exchange rate fixing for the new drawdown or the new rate fix period is done on this day.

To fix the exchange rate for the drawdown currency, click ‘Exrrate Fixing’ tab. The ‘Exchange Rate Fixing’ screen is displayed, as shown below:

 

The system arrives at the exchange rate fixing date for the drawdown currency based on the exchange rate fixing days maintained at the tranche level and the holiday validation currencies specified for the drawdown currency.

For more details, refer the heading ‘Specifying currency details for the tranche’ in this chapter.

You can specify the following details in this screen:

Effective End Date

You have to specify an end date for the new rate to be effective in the system. The start date will be equal to the drawdown date. You have to capture the date in ‘DD-MMM-YYYY’ format.

Exchange Rate

The default exchange rate is displayed here. The system picks up this rate from the ‘Currency Rates Maintenance’ screen. You can change the rate, if required. You can enter upto 15 decimal points.

Remarks

You can also capture additional information, if required. This is used only for information purposes.

Note

It is not mandatory for you to fix the exchange rate before you fix the interest rate.

6.2.8.1 Saving the New Exchange Rate

Click ‘Ok’ button to save and exit the screen. When you save the drawdown, the system triggers the ‘EXFX’ event with the exchange rate fixing notice. For future dated drawdowns, you need to fix the exchange rate before the value date of the drawdown.

Subsequently, you have to manually fix the exchange rate for the drawdowns. You have to fix the rate for the next period before the end of the current period. However, if you do not do the rate fixing for the subsequent periods, Oracle FLEXCUBE applies the latest fixing rate for the rest of the period.

Note

 

For more information, refer the heading ‘Fixing Exchange Rate after drawdown booking’ in this chapter.

6.2.9 Specifying Drawdown Interest Details

You can view the interest and margin components, if applicable to the drawdown, in the ‘ICCF Details’ screen. These details default from the tranche under which the drawdown is being processed. Click ‘Interest’ tab to invoke this screen.

 

6.2.9.1 Amending Interest Basis

The interest basis defaults from the product level. However, you can change the default value anytime during the lifecycle of the contract except for contracts with interest capitalization type of renewal instructions. When you change the day basis, the system re-computes the schedule interest amount from the start date of the component. The amendment becomes applicable from the value date of the contract. Note that the system considers the margin rates maintained for each participant while re-computing the interest.

The interest for each currency is calculated using the interest basis, which you select:

Note the following:

You can use the navigation buttons - to view the interest components associated with the drawdown.

Amortization Constant Component

The default value from the product gets defaulted here. The check box is selected if this is an amortization constant component. You cannot change it in the contract level.

Compensatory Component

The corresponding compensatory component is displayed from the product for the main interest component.

Note

 

6.2.9.2 Specifying Billing Preferences

The billing preferences maintained at the product level defaults to the contracts. You can amend these preferences at the contract level only if you have specified the same at the product level.

Billing Notice Required

Select this check box to indicate that you would like to send a billing notice for the interest component.

No of Days

Specify the number of days prior to the billing date that the billing notice needs to be sent.

Note

You can not amend these values if the Billing Notice Required option is deselected at the product level.

For details on the above screen, refer the heading ‘Specifying Interest Details for a Contract’ in the ‘Processing Interest’ chapter of the Interest User Manual.

6.2.9.3 Fixing Interest Rate for the Drawdown

Just as you fix the exchange rate for the drawdown currency, you can also fix the interest rate for a predefined period. The Interest rate fixing days refers to the number of business days before the value date of the drawdown or the new rate fix period. Interest rate fixing for the new drawdown or the new rate fix period is done on this day.

Note

 

For more details regarding dual authorization, refer the heading titled ‘Authorizing Overrides’ in the chapter titled ‘Loan Syndication Contracts - Part 1’ of this User Manual.

The system arrives at the Interest rate fixing date for the drawdown currency based on the Interest rate fixing days maintained at the tranche level and the holiday validation currencies specified for the drawdown currency.

For more details, refer the heading ‘Specifying currency details for the tranche’ in this chapter.

To fix the interest rate for the drawdown currency, click the ‘Rate Fixing’ tab in the ‘ICCF Details’ screen and invoke the ‘Rate Fixing Details’ screen, as shown below:

Note

 

Note

Rate Fixing button gets enabled in ‘ICCF Details’ screen only if rate fixing is selected at the product level.

You can specify the following details in the ‘Rate Fixing Details’ screen:

Rate Code

You have to specify the floating rate code based on which you can specify the interest rate fixing tenor and the default fixing rate.

Tenor Value

You can specify the rate fixing period by specifying a ‘Tenor Value’ or the ‘Rate Effective End Date’. If you are specifying a tenor, you can select a value from the option list which displays the tenor values associated with the rate code you select. This is based on your maintenance in the ‘Floating Rate Code Definition’ screen. Upon choosing a value, the following details are also displayed:

Rate Effective End Date

If you do not want to specify a ‘Tenor Value’, you have the option to capture the end date of the rate fixing period. This date should not be less than or equal to the ‘Rate Effective Start Date’. The system displays the following after you specify the end date:

Rate

The system defaults the interest rate based on the rate code and the tenor value/effective end date you specify for the drawdown. You can change the default rate, if required.

If the base rate is changed or new rate is added or the floating rate codes are changed, the system recalculates the interest. Note that it considers the margin rates maintained for the participants while recalculating the interest due for the participants.

For more details on negative rate processing, refer the title ‘Maintaining Loans Parameters Details’ in the chapter ‘Bank Parameters’ in Core Services User Manual.

Remarks

You can also capture additional information, if required. This will be used only for information purposes.

Click the ‘Ok’ button to save and exit the screen.

Note

 

6.2.10 Capturing the Value date

On click of unlock button you are allowed to capture the value date by altering the rate effective start date.

Note

The following actions should be performed automatically on click of ‘OK’ button in the ‘value date’ field.

 

For more information on bidding refer ‘Bidding Contract’ section in ‘Interest’ manual in ‘Modularity’ module.

For details on the ‘LB Interest Rate Fixing’ screen, refer the heading ‘Fixing Interest Rate after drawdown booking’ in this chapter.

6.2.10.1 Rate Setting

To set the rate setting rules for the borrowers drawdown, click the ‘Rate Setting’ in the ‘ICCF Details’ screen and invoke the ‘Rate setting’ screen, as shown below:

 

Specify the following details.

Contract Details

Product code

The system displays the product code.

Contract Ref number

The system displays the contract ref number.

User ref number

The system displays the user ref number.

Customer

The system displays the customer name.

Facility name

The system displays the facility name.

Split Details

Split number

The system displays the split number.

Principal roll amount

The system displays the principal roll amount.

Interest roll Amount

The system displays the Interest roll amount.

Roll Product

The system displays the roll product.

Total roll amount

The system displays the total roll amount.

Maturity date

The system displays the maturity date.

Interest rate rounding rules

Rounding rule

Select the rounding rule from the adjoining drop down list. Select one of the options listed below:

Rounding Unit

The rounding unit enables only if the you have selected the ‘rounding rule’ as ‘Down’ and ‘Upto’ .

Interest rate period

Select one of the interest rate periods from the options given.

Once all the Rate setting rules are maintained and when you come out of ‘Rate Setting Rule screen’ by clicking OK button (Green tick), the following override messages are displayed

6.2.11 Specifying Drawdown SKIM Details

The SKIM details captured for the tranche gets propagated to the drawdown contract. You are allowed to amend the details at the drawdown level. To view and amend the details, if needed, click the ’Skim’ tab. The ‘SKIM Details – Drawdown’ screen is displayed.

 

The details of the payer and receiver of Skim and the Skim rate gets defaulted to the respective participant contracts for processing. The accounting entries are also passed in the corresponding participant contracts.

Note

If SKIM details are not maintained for the tranche, you cannot define them afresh at the drawdown level. Atleast one combination of Skim should be defined for the tranche.

For details on the fields in this screen, refer the heading ‘Defining SKIM details for tranche participants’ in this chapter.

For details on the accounting entries defined for the Skim components, refer the heading ‘Maintaining Skim components for participants’ in the ‘Defining Products for Loan Syndication’ chapter of this User Manual.

Note

 

You have the option to amend the Skim details for a drawdown through the ‘Skim Amendment’ screen.

For more information on this screen, refer the heading titled ‘Amending drawdown SKIM details’ in this chapter.

6.2.12 Viewing Drawdown Charge Details

The charge components associated with the drawdown product is applied to the drawdown. You can view the charge details in the ‘Contract Charge Details’ screen. Click the ‘Charge’ tab to invoke this screen.

 

For more details on this screen, refer the heading ‘Modifying charge details for the tranche’ in this chapter.

6.2.13 Defining Drawdown Fee Schedules

The fee components associated with the drawdown product is applied on all drawdowns processed under it. You can view the fee component schedule details in the ‘Fee Components’ screen. Click the ‘Fee’ tab in the ‘Drawdown Contract Online’ screen to access it.

For details on the fields in this screen, refer the heading ‘Defining tranche fee schedules’ in this chapter.

6.2.14 Viewing Drawdown Tax Details

You can collect withholding tax on the fee/interest collected by the participants of a drawdown. However, tax is not applied on the fee collected from the participants. The tax details, if applicable for the participant product (linked to the drawdown through the facility product) is applied on the drawdown. To view the details, click the ‘Tax’.

 

This screen displays the tax rules for each participant based on which withholding tax is computed on the fee or interest components. Tax rules associated with the drawdown product defaults to the drawdown. You can waive the subsequent tax to be applied for a participant and tax rule combination.

The system passes the entries for tax based on the event you specify in the ‘Product Tax Linkage’ screen. Typically, tax on fee is calculated upon liquidation of the fee (event ‘FLIQ’ will be associated with the rule) and tax on interest is computed on interest liquidation (event ‘LIQD’ is associated with the rule).

For details on associating tax with a product, refer the heading titled ‘Specifying tax details for a participant product’ in the ‘Defining Products for Loan Syndication’ chapter of this User Manual.

For more information on the Tax sub-system of Oracle FLEXCUBE, refer the Tax User Manual.

6.2.15 Defining Overwrite Settlement Instructions for the Drawdown

You can maintain settlement instructions for various components such as fees, charges, tax, principal, interest, and so on, using the ‘Overwrite Settlement Instruction Details’ screen. Using this screen, you can post liquidation entries into an Internal GL account instead of the customer account at the time of rollover. Click ‘Overwrite default SI’ in the ‘Drawdown Contract Online’ screen to invoke the following:

 

Enter the details as specified below:

Component

This screen displays the all the components displayed in the Settlement Message Details screen.

Internal GL

Specify the Internal GL accounts into which you want to post the liquidation entries for the components.

Overwrite Default Settlement Instruction

Select the ‘Overwrite default settlement instruction’ check box to confirm that the liquidation entries should be posted into the Internal GL account. System posts the entries to the Internal GLs only if you check this box. Otherwise, system posts the entries as per the settlement instructions specified for the component of the contract.

Note

6.2.15.1 Authorizing Overrides for Drawdown

You need to perform dual authorization, if you have selected the Overwrite SI option for any of the following events:

For more details, refer to the section ‘Authorizing the overrides for tranche’ in the same chapter.

6.2.16 Viewing Settlement Instructions for the Drawdown

You can view the settlement instructions for the drawdown in the ‘Settlement’ screen. Click the ‘Settlement’ tab to view the details.

 

The system obtains the settlement account for each drawdown component based on the SSI Mnemonic selected for the component.

If the ‘Chinese Characters in Payment’ box is checked in the ‘Loan syndication- Branch Parameters’ screen, then only you can enter the Chinese characters in the field 57, 59, and 70 for foreign currency and local currency settlement instructions / accounts and there are no validations in the system. You need to operationally control it.

You are allowed to enter the information in Chinese or English or a combination of both in this field. If it is a combination, then the system considers it as Chinese and allow up to 35 characters.

Note

This is applicable only for ASPAC region.

For more details about the ‘Settlement Message Details’ screen, refer the Settlements User Manual.

6.2.17 Viewing MIS Details for the Drawdown

If you have maintained MIS details for the DD (drawdown) product, the same will default to the drawdown. To view the details, click the ’MIS’ tab.

 

For details on the ‘Transaction MIS Details’ screen, refer the MIS User Manual.

6.2.18 Specifying Parties for the Drawdown

You can also specify different entity or party types that would be applicable for the borrower drawdown as well as the applicable parties belonging to the selected party type. This is done in the ‘Party Details’ screen. Click ‘Party Type’ in the ‘DrawDown Contract Online’ screen. The party types associated with the drawdown product defaults to the drawdown. You can change the defaulted values, if required.

 

For more details on the above screen, refer the heading ‘Specifying parties for the facility’ in this chapter.

6.2.19 Specifying UDF Values for the Drawdown

The UDFs defined for the drawdown product is applied for the drawdowns processed under it. You can view the UDFs, if applicable, in the ‘User Defined Fields’ screen. Click the ‘UDF’ tab to invoke this screen.

 

For more details on the above screen, refer the UDF (User Defined Fields) User Manual.

If the UDF ‘RATE-VARIANCE’ is maintained as a non-zero value for a tranche contract to which the drawdown is linked, dual authorization is required for some select operations.

For details on operations that require dual authorization, refer the section ‘Authorizing Overrides’ in the chapter titled ‘Loan Syndication Contracts - Part 1’ of this User Manual.

The UDF ‘PAYOFF-FEE’ attached to drawdown products is used to determine the flat fee amount. The value maintained for this UDF for the tranche contract is inherited to all linked drawdown contracts. If required, you can change the value at drawdown level. If the defaulted UDF value is overwritten at the drawdown level, then the tranche and drawdown UDF values are different. In this case, the subsequent UDF changes at the tranche contract level is not propagated to the drawdown.

6.2.20 Viewing Drawdown Advices

The advices associated with the drawdown product (in the ‘Product Event Accounting Entries & Advices’ screen) is applicable for the drawdown. Click the ‘Advice’ tab to invoke the ‘Advices’ screen.

 

For more details on this screen, refer the heading ‘Modifying tranche advice details’ in this chapter.

After capturing the drawdown details, you have to save the same and have it authorized by your supervisor.

After you save the drawdown, you can view the following details of the contract:

This section explains only those details that are unique to a drawdown. For details on the other options (Diary Events, Netting Cash Flow Summary, Message Preview, Participant Summary, Events), refer the following sections in this chapter:

6.2.21 Viewing EI for the Drawdown

You can view the effective interest (EI) rates applied on the drawdown through the Effective Interest Rate details screen. Click the ‘Effective Interest Rate’ to invoke this screen.

 

In this screen you can view the ‘Effective Interest Rate’ and the ‘Start Date’ from which interest rate is effective in the system.

6.2.22 Maintaining Escrow Account Details

You can link escrow accounts to a contract using the ‘Escrow Account Maintenance’ screen. Click the ‘ESC’ tab in the ‘Drawdown Contract Online’ screen to access this screen.

 

You can specify the following details in this screen:

Account Number

Select the account number of the customer from the adjoining option list.

Account Desc

System displays the description of the account number.

Escrow Type

System displays the Escrow type.

Escrow Balance in LCY

System displays the available escrow balance in local currency.

Note

 

Example

6.2.22.1 Amortization for Escrow Components

If the Escrow component is part of amortization constant amount, then while redefining the following validations are performed:

Note

Escrow component can be amended only through schedules details tab and not through CAMD or VAMI. You cannot amend escrow interest amounts through contract amendment for Amortization schedule type contracts, if Escrow components are part of the amortiza­tion constant.

6.2.23 Specifying the Special Penalty Components

You can select components to which late payment charges are applicable for both commitment and loan contracts using the ‘Special Penalty Components’ screen. To invoke this screen, click the ‘Special Penalty’ tab in ‘Drawdown Contract Online’ screen.

 

Specify the following details:

Component

System defaults the components selected for late payment charge application at the product level.

Apply Special Penalty

Select this check box to indicate that system should apply special charges to the penalty component.

6.2.23.1 Processing the Late Payment Charges

System identifies the loan contracts where grace period has expired and tracks due date, amount paid and amount settled for each component of the loan. If late payment charge component has been defined for a loan contract, that is,. if the ‘Special Penalty Component’ is selected for a component in a contract, then system does the following:

6.2.24 Specifying Media for Message Generation

You can specify the media for the message generation in ‘Media for Message Generation’ screen. You can invoke this screen by clicking ‘Media Priority; tab. This button is enabled only if the ‘FpML Type’ option is unchecked and the ‘Media Priority’ option is checked at the product level.

 

The system displays the following details:

You can specify the following details:

Media for All Investors

Select this check box to indicate that the media is applicable for all the investors.

Media

Specify the individual participants and media for primary entity of each participant if the ‘Media for All Investors’ option is not selected. The adjoining option list displays all valid media maintained in the system. You can select the appropriate one.

You are allowed to select any media for primary entity of individual participant only if that media is maintained for primary entity of individual participant in the ‘Customer Entity Maintenance’ screen and also message type corresponding to the media is maintained for the event at the product level.

If there are multiple events to be registered in a single transaction from the same screen, the system validates such that message type corresponding to the media is maintained at least for one event at the product level.

In case, if the selected media is not available for any messages attached for some event, then the message for that event is generated based on the priority maintained in the ‘Customer Entity Maintenance’ screen.

During the drawdown booking, if the ‘Media for all investors’ is selected as ‘FPML’ , then the message generation corresponding to the events will be as follows:

Events

Message generation

DNOT

FPML message will be generated

IRFX

Since there is no message attached with media FPML for IRFX event system checks the priority of Entity1 of participant and message is sent through media ‘FAX’.

 

If there is no media order maintained for Entity1, then system will generate the message using customer entity maintenance.

6.2.25 Amortize schedule type DD Contracts

You need to do the following set ups at the contract level for amortization schedule type contracts.

The ‘Liqd Interest on Prepayment’ flag is unchecked and disabled at the contract online screen. You are not allowed to perform any changes here. Partial payments is not allowed for agency amortization type of contracts and Partial payment allowed flag is unchecked and disabled for Amortization schedule type contracts. In CONTRACT tab, field ‘Amortization Type’ can be selected as ‘Reducing Balancing’ or ‘Rule 78’. The default value is ‘Reducing Balance’ and Schedule type is displayed as ‘AMORTISE’.

Contract schedules parameters like component, start date, number, frequency, units and other fields are defaulted. Amount is automatically derived by the system and is disabled. Based on these parameters, installment amount of each payment schedule is derived.

Contract schedule frequency redefinition to frequency values other than Monthly and Bullet are not allowed for all the components. System derives amortize amount based on the Principal and tenure of the contract using the EMI computation function.

Principal portion of the payment is derived using the formula Principal = Amortize amount– Interest component amount. System supports reducing balance amortization. And, amortization is not applicable for Sighting Funds applicable contracts.

6.2.26 Viewing Drawdown Summary

You can view the drawdown details using the ‘Drawdown Summary’ screen. You can invoke the ‘‘Borrower Drawdown Summary’ screen by typing ‘LBSDDONL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

You can view the following fields:

6.2.27 Fixing Exchange Rate After Drawdown Booking

You can perform a case independent search only if the parameter, ‘CASE_SENSITIVITY’ in cstb_param, is set to ‘Y’.

If you do not fix the exchange rate during drawdown booking (the event ‘EXFX’ is not fired for such drawdowns) you have the option to fix the same after the booking event. This is applicable if the drawdown currency is different from the tranche currency. You can invoke the ‘Exchange Rate Fixing’ screen by typing ‘LBDEXRFX’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

All subsequent exchange rate fixing after the drawdown booking is done through the above screen. Through this screen, you can fix the exchange rate for the current period (before the effective start date) as well as specify a rate for a new period. These options are discussed below.

6.2.27.1 Using the ‘Unlock’ option to fix the exchange rate before the start date

You can use the unlock option to fix the exchange rate before the effective start date of the exchange rate fixing period. If you attempt to fix the exchange rate after the effective start date, the following message will be displayed:

Exchange rate already fixed

To amend the exchange rate for the current fix period (i.e. before the effective start date), do the following:

  1. Select the drawdown for which you want to fix the exchange rate. You can use the navigation button provided in the toolbar of the screen to select the drawdown. Alternatively, you can also use the F7 and F8 keys to fetch the required drawdown. The system will display the ‘Fixing Date’ based on the exchange rate fixing days maintained for the drawdown currency at the tranche level. The ‘Fix Notification Date’ will be one day prior to the ‘Fixing Date’ for such drawdowns (for which exchange rate fixing is done before the effective start date).
  2. Unlock the selected drawdown. To do this, Select Unlock option from the menu.
  3. Specify the effective end date for the period. This date should not be greater than the drawdown maturity date and earlier than the ‘Effective Start Date’. When you specify the end date, system will accordingly display the ‘Next Effective Start Date’ (Effective End Date + 1).
  4. Change the default exchange rate, if required. This rate is picked up from the ‘Currency Rates Maintenance’ screen. You may also capture any remarks, if required.
  5. Select Save from the menu to save the changes. The system will display a confirmation message if the save operation is successful.

Note

    • If you have defined revaluation schedules for a period, you cannot fix the exchange rate for that period
    • In case of future dated drawdowns, exchange rate should be fixed before the value date of the drawdown
    • If you fix the exchange rate for a contract wherein the advices ‘BORR_EXFX_ADV’ or ‘PART_EXFX_ADV’ are suppressed for the EXFX event, then the system dis­plays the following override when you save:

‘Advice for event EXFX is suppressed for the product, Do you want to continue?’

Advice for event ROEX is suppressed for product, Do you want to continue?

Advice for event CREX is suppressed for product, Do you want to continue?

6.2.27.2 Using the ‘New’ option to fix the exchange rate after the effective start date

You can use the ‘New’ option to fix the exchange rate for the next period. Follow the steps given below to fix the exchange rate using this option:

  1. Select New from the menu
  2. Select the reference number of the drawdown for which you want to fix the exchange rate for the next period. The option list will display the reference numbers of drawdowns with effective start date earlier than the current system date. This indicates that you are fixing the exchange rate for the next period. By default, the effective end date of the previous period+1 will become the effective start date of the new period. The system displays the ‘Fixing Date’ for the next period based on the exchange rate fixing days maintained for the drawdown currency at the tranche level.
  3. Change the effective start date, if required. By default, the system displays the current date. You can change it to date in the future such that the date is not beyond the drawdown maturity date. However, if the end date of the previous exchange rate fixing period is greater than the system date, the effective start date of the current period should be greater than the previous period end date.
  4. Specify the effective end date for the period. This date should not be greater than the drawdown maturity date but may be equal to the effective start date.
  5. Change the default exchange rate, if required. This rate is picked up from the ‘Currency Rates Maintenance’ screen. You may also capture any remarks, if required.
  6. Select Save from the menu to save the changes. Since you are fixing the exchange rate before the actual fixing date, the system will display an override message indicating the date and time when the actual fixing should have taken place, before saving the details. A confirmation message is displayed if the save operation is successful.

6.2.28 Fixing Interest Rate after Drawdown Booking

For the first time, you can fix the interest rate as part of drawdown booking through the ‘Rate Fixing Details’ screen. Subsequent rate fixing should be performed through the ‘LS Interest Rate Fixing’ screen. You can invoke the ‘Interest Rate Fixing’ screen by typing ‘LBCRPLIF’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

You can view the agent reference number in this screen.

For interest rate fixing also you have the ‘Unlock’ (to fix the interest rate before the effective start date) and ‘New’ (to fix the interest rate after the effective start date) option. For more details on negative rate processing, refer the title ‘Maintaining Loans Parameters Details’ in the chapter ‘Bank Parameters’ in Core Services User Manual. For details on the two options, refer the heading ‘Fixing exchange rate after drawdown booking’ in this chapter.

For more information on the editable fields in the above screen, refer the heading ‘Fixing interest rate for the drawdown’ in this chapter.

You can specify the media for the message generation in ‘Media for Message Generation’ screen. You can invoke this screen by clicking ‘Media’ tab. This tab is enabled only if the ‘FpML Type’ option is deselected at the contract level and the ‘Media Priority’ option is checked at the product level.

If this tab is enabled, then the system displays an override message saying to view the ‘Media for Message Generation’ screen. If not, the system handoffs the message as per the details maintained in the ‘Customer Entity Maintenance’ screen.

For more information on the ‘Media for Message Generation’ screen, refer the heading ‘Specifying Media for Message Generation’ in this chapter.

6.3 Amending Drawdown SKIM Details

You can amend the Skim details maintained for a drawdown in the ‘Skim Amendment’ screen.

For details on maintaining SKIM for a tranche, refer the section titled ‘Defining SKIM details for tranche participants’ in this chapter.

You can invoke the ‘Amending Drawdown SKIM Details’ screen by typing ‘LBDSKMAM’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

You can use the ‘New’ option for amending the Skim details for an authorized drawdown. The ‘Unlock’ option is available only if the drawdown is unauthorized.

Note

During amendment:

When you ‘Unlock’ or select the ‘New’ option, as the case may be, do the following as part of amendment:

  1. Add a new combination of Payer and Receiver Participants. The option list displays the participants selected for the drawdown. When you select a ‘Payer Participant’ or ‘Receiver Participant’, the corresponding name and component are also displayed. The system displays the number of times you select the participant for a combination. However, you cannot repeat a combination of Payer and Receiver
  2. Specify the value date when the amendment should be applied to the drawdown. This date should not be earlier that the drawdown value date or later than the drawdown maturity date.
  3. Specify the Skim rate for the combinations maintained for the drawdown
  4. The details get updated to the drawdown upon save of the amendment. You can view the same in the ‘Skim Details – Drawdown’ sub-screen invoked from the ‘Drawdown Contract Online’ screen. The drawdown status is ‘Unauthorized’ after an amendment. The same gets updated to ‘Authorized’ only after the amendment is authorized.

For more details on the ‘Skim Details – Drawdown’ sub-screen, refer the heading titled ‘Specifying drawdown SKIM details’ in this chapter.

  1. Viewing the Skim Rate History

In the ‘Value Date Wise Skim History’ section of the ‘Skim Amendment’ screen, you can view the history of modifications/amendments made till date for a payer and receiver combination. The following details are displayed here:

In the ‘Skim Rate History For:’ section of the screen, you view the latest values associated for a payer and receiver combination, prior to the amendment. If only a single amendment is processed for the drawdown, both the history sections will display the same details.

Following points are noteworthy here with reference to interest rate changes:

In addition, the margin value can change due to changes in the tranche outstanding because of a back value dated drawdown. If the amount due from a borrower changes due to a back value dated drawdown, the amount receivable from the participants also change and this change is shared by the participants based on the participant sharing ratio for the associated business event (MRFX).

The following points are noteworthy with respect to payable/ receivable tracking:

Note

You can reverse a payment of a payable/receivable by clicking the ‘Reverse’ option . This option is enabled only if you access the above screen directly from the Application Browser (to do this, you need to choose LS Operations and doubleclick on the Payment option under Receivable Payable).

6.3.1 Processing Contracts For Secondary Loan Trading

If you have selected the ‘Payment Browser’ preference as part of the preferences for the branch for secondary loan trading (in the ‘Secondary Loan Trading – Branch Parameters’ screen), then the system processes the payments meant for trading through the ‘Payment Browser’ screen. The payments that are processed through this browser are:

6.4 Processing Future Value Dated Payments

Oracle FLEXCUBE allows future dated liquidation of Prime drawdown contracts if ‘Liquidate Interest on Prepayment’ option is selected for the drawdown contract in the ‘Drawdown Contract Online’ screen.

In this case, the interest computation is done for the prepaying principal and is computed till the value date of the future dated payment. On the value date of the payment, system recalculates the interest on the prepaid principal and compares the calculated interest amount with the interest amount that was calculated earlier by the system, while capturing the instructions for future dated payment. If there is a mismatch in the interest amount, system logs an exception and aborts the payment process.

You cannot do future dated payments for contracts which are instructed for a rollover or renewal. In such a case, you need to remove or reverse the rollover/re-price instruction on the contract in order to process a future dated payment. On the contrary, if you are reversing a future dated payment of a contract after instructing it for a rollover or re-pricing, then there will not be any change in the rollover/re-price amount. On the value date of the rollover /re-price, system will rollover/re-price the captured rollover\re-price amount. System liquidates the remaining future dated payment reversal amount based on the Liquidate Interest /Liquidate Principal options selected in the ‘Rollover’ tab of the ‘Drawdown Contract Online’ screen.

Note

 

6.5 Processing Revaluation of Drawdowns

When you initiate a new drawdown, Oracle FLEXCUBE checks whether revaluation is applicable for the drawdown. If selected, it arrives at the revaluation schedule dates based on the following:

Even if revaluation schedules have been defined with the ‘Start Date’ as the Value Date, you have to manually fix the exchange rate at the time of booking the contract.

For more details, refer the heading ‘Fixing exchange rate for drawdown currency’ in this chapter.

During EOD batch, system checks if there is a revaluation schedule for any drawdown. If revaluation is due, system further checks if the rate is already fixed for the current date (Manual Exchange Rate Fixing). If it is already fixed, system skips the revaluation process and considers only the next revaluation date for subsequent revaluations.

However, if you have fixed the exchange rate on the value date as part of contract initiation, and revaluation schedules have been defined with the Start Date equal to the Value Date, system again does a revaluation as part of EOD batch on the Value Date. The rate derived for the Rate Code and Rate Type combination at the time of running the batch, is used for revaluation. System uses this rate to convert the amount in the drawdown currency into its equivalent in the tranche currency.

Note

Once auto revaluation commences, you cannot do a manual rate fixing till the end date of that schedule.

6.6 Allowing Back Valued Activities on a Drawdown Be­yond the Trade Date

Oracle FLEXCUBE allows you to perform the following back valued activities on a drawdown, beyond the last trade date, for both revolving and non-revolving tranches:

Note

System performs the following activities as part of any back value dated activity on a drawdown, beyond the trade date:

6.7 Amending Global Amount for a Contract

You can specify the Global Tranche or Global Drawdown amounts in the ‘Tranche Online’ and ‘Drawdown Online’ screens respectively during contract booking. Any amendment to the Global Tranche or Global Drawdown amounts is done in the ‘Global Amount Amendment’ screen.

Using the ‘Global Amount Amendment’ screen, you can amend all non-lead Tranches; however, you can only amend those non-lead Drawdowns where the Cascade Participation is set to ‘No’.

You can invoke the ‘Global Amount Update’ screen by typing ‘LBDGLAMT’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

To amend the Global Tranche or Drawdown amounts, do the following:

The system automatically updates the Global Amount for non-lead Tranches or Drawdowns in the following scenarios:

The latest Global Amount for tranche as on the date of handoff is used for handoff of the Commitment Reduction to the Loans QT system.

6.7.1 Global Amount for Tranche

Note

The following for the global amount for tranche:

6.7.2 Global Amount for Drawdown

Note

The following for the global amount for drawdown:

6.8 Processing Participant Contracts

When you ‘BOOK’ a borrower tranche, the system creates the related participant contracts. It picks up the participant tranche product linked to the borrower tranche product (in the ‘Loans Syndication – Facility Product Preferences’ screen) and the participant details maintained for the borrower tranche contract to create the corresponding participant tranche.

In the same manner, it picks up the participant drawdown product to create the participant drawdowns. The contract uses the participant details maintained for the borrower tranche contract.

The processing of participant contracts depends on the ‘Participant Process’ mode, whether ‘Job’ or ‘Online’, set for your branch. You have to specify this as part of defining parameters for your branch in the ‘Branch Parameters – Detail’(OLDBRMNT) screen.

6.8.1 Processing in the ‘Online’ Mode

If the ‘Participant Process’ mode is set to ‘Online’ for your branch, the system automatically processes the related participant contracts, as mentioned above. In the ‘Online’ mode, you can save and authorize the borrower side contracts (facility, tranche or drawdowns) ONLY if the corresponding participant side contracts are processed successfully. You can view the status of the participant contracts in the audit trail section at the bottom of the respective borrower contract. For successfully saved borrower contracts, the ‘Participant Processing Status’ is displayed as ‘Processed’.

You can also view the details of borrower and participant contracts processed in Oracle FLEXCUBE in the ‘JOB PROCESS STATUS’ screen.

For more details on the above screen, refer the heading ‘Viewing borrower/ participant contract processing status’ in this chapter.

6.8.2 Processing in the ‘Job’ Mode

If the ‘Participant Process’ mode is set to ‘Job’ for your branch, you have to initiate a Background Job which picks up the participant contracts created in the system for further processing.

You have to initiate the Background Process as part of BOD programs run for the branch. The initiation is done through the ‘Participants Propagation’ (LBSPPROP)screen.

The ‘Job Status’ is ‘Job’. When you click the ‘Start Job’ button, the Background Job gets initiated in Oracle FLEXCUBE. In the ‘Job’ mode, after you save the borrower side contract, you can proceed with the next contract while the system processes the participant side contracts in the background. However, you can authorize the borrower side contracts only if the corresponding participant side contracts are processed successfully.

For successfully saved borrower contracts, the ‘Participant Processing Status’ (in the audit trail section at the bottom of the respective borrower contract) displays any one of the following statuses:

The status gets updated when the Background Job processes the participant contracts. After processing, the status reads ‘Processed’ or ‘Failed’, as the case may be.

Before executing the EOD operations for the branch, you have to stop the Background Job. This is mandatory. To stop the process, you have to click the ‘Stop Job’ button in the ‘Participants Jobs’ screen.

You can also view the details of borrower and participant contracts processed in Oracle FLEXCUBE in the ‘JOB PROCESS STATUS’ screen.

For more details on the above screen, refer the heading ‘Viewing borrower/ participant contract processing status’ in this chapter.

6.9 Viewing Participant Contracts

To recall, when the BOOK event for borrower facility, tranche or drawdown is triggered, the system creates the related participant facility, tranche or drawdowns You can view the participant contracts initiated by the system in the ‘Loans Syndication – Participant Contract Online’. You can also view the position identifier description in case the participant is self participant.The features of this screen are discussed in the following sections.

6.9.1 A description of the ‘Loans Syndication – Participant Contract Online’

You can invoke the 'Participant Contract Input’ screen by typing ‘LPDCOMNT’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

In the above screen, you can view the following details about the contract:

In addition, a vertical toolbar is also provided in the screen. These buttons are used to invoke other sub-systems required for processing a participant contract. These buttons have been described briefly below:

Button

Description

Entity

Click this tab to view the entities defined for the participants, defaulted from the participant details in the parent borrower tranche or drawdown.

Settlements

Click this tab to view the settlement details for the participant, defaulted from the SSI Mnemonic selected for the participant in the borrower tranche.

MIS

Click this tab to view the MIS details for the contract, defaulted from the participant details in the parent borrower tranche or drawdown.

UDF

Click this tab to view the User Defined Fields (UDFs) for the contract, defaulted from the participant details in the parent borrower tranche or drawdown.

Tax

Click this tab to view the ‘Participant Tax Details’ screen.

Payment Schedule

Click this tab to view the payment schedule details.

Rate History

Click this tab to view the participant margin rate history.

Diary

Click this tab to view the diary events defined for the participant contract, defaulted from the parent borrower tranche or drawdown.

Events

Click this tab to invoke the ‘Event Log Details’ screen. Here, you can view the accounting entries for each event and the overrides encoun­tered, if any.

LS

Click this tab to view the syndication details

6.10 Modifying Participant Details

You can amend the participant details, if required. To do this, you have to first select the contract that needs to be amended. After selecting the contract, select Unlock from the menu to unlock the contract for making the amendment.

You cannot amend the following details:

Contract Reference Numbers

When the participant contracts are initiated, the system generates reference numbers (Contract Reference Number and User Reference Number) for them in the same manner as for normal borrower contracts.

For the purpose of tracking a borrower tranche, the reference numbers of the resultant participant tranche contracts are linked to the reference number of the parent borrower tranche.

For the purpose of tracking a borrower drawdown, the reference numbers of the resultant participant drawdown deposit contracts are linked to the reference number of the parent borrower drawdown, as well as to its’ parent borrower tranche.

Product and contract details

As mentioned earlier, in the product preferences for a borrower facility product, you specify the corresponding participant facility product that is to be used for the related participant facility contract created by the system. This is the product that would be used for the creation of the participant facility contract, along with the participant details specified in the borrower facility contract.

Similarly, in the product preferences for a borrower tranche or drawdown product, you specify the corresponding participant tranche or drawdown product that is to be used for the related participant tranche or drawdown created by the system. This is the product that would be used for the creation of the participant tranche or drawdown, along with the participant details specified in the borrower tranche.

In the ‘Contract Details’ section of the screen, you can specify the following details:

Auto Collection

You have to check this option to indicate that collection from the participant must be initiated automatically. The specification made in the preferences for the participant tranche or drawdown product used by the participant contract is displayed here. You can change it, if required.

Auto Disbursement

This option indicates whether the amount repaid by the borrower must be disbursed automatically. The specification made in the preferences for the participant facility, tranche or drawdown product used by the participant contract is displayed here. You can change it, if required.

Remarks

The remarks specified for the parent borrower facility, tranche or drawdown, under which the participant contract is created, will default here. You can modify these remarks appropriately, if required.

6.10.1 Viewing Participant Entity Details

You can view the participant entity details in the ‘Participant Entities’ screen. These details are defaulted from the participant details maintained for borrower facility/tranche/drawdown associated with the participant facility/ tranche/drawdown. Click the ‘Entity’ tab to invoke this screen.

 

You can add or delete entities and also assign a different primary entity for the participant, if required. You can view the position identifier description in case the participant is self participant.

For more details on the options available in this screen, refer the heading ‘Specifying drawdown entity details’ in this chapter.

6.10.2 Viewing Settlement Instructions for the Participant

You can view the settlement instructions for the contract in the ‘Settlement Message Details’ screen. Click the ‘Settlements’ tab to view the details. The details are defaulted based on the SSI Mnemonic selected for the participant in the borrower tranche/drawdown.

 

For more details about the ‘Settlement Message Details’ screen, refer the Settlements User Manual.

6.10.3 Viewing Participant MIS Details

If you have maintained MIS details for the participant tranche/drawdown product, the same will default to the participant tranche/drawdown. To view the details, click the ‘MIS’ tab.

 

For details on the ‘Transaction MIS Details’ screen, refer the MIS User Manual.

6.10.4 Viewing UDF Values for the Participant Contract

The UDFs defined for the participant product is applied for contracts processed under it. You can view the UDFs and its values, if applicable, in the ‘User Defined Fields’ screen. Click the ’UDF’ to invoke this screen.

 

For more details on the above screen, refer the UDF (User Defined Fields) User Manual.

6.10.5 Viewing Participant Tax Details

You can collect withholding tax from participants on the interest and fee components. If you have associated tax rules with the participant tranche/drawdown product, the same is become applicable to the contract. You can view the tax details for the contract in the ‘Tax Details’ screen.

Click the ‘Tax’ tab to invoke the screen.

 

The following details are displayed in this screen:

For details on maintaining tax rules and schemes, refer the Tax User Manual.

6.10.6 Viewing participant payment schedules

Based on the payment schedules captured for the components due to the participants (Interest, Fee, Skim, and so on), Oracle FLEXCUBE computes the schedules and the amount payable for each schedule in the ‘Payment Schedule Details’ screen. You can view the position identifier description in case the participant is self participant.

To view the details, click the ’Payment Schedule’.

 

6.10.7 Viewing Rates History

To view the margin rate history, click the ‘Rate History’ tab. The ‘Rates History’ screen is displayed, as shown below:

 

The following details are displayed on this screen.

6.10.7.1 Viewing Margin History

You can view the participant’s margin details that are applicable for the contract, by clicking the ‘Margin History’. The ‘Rates History’ screen is displayed, as shown below:

The system displays the following details.

Margin History Interest Component

The system displays the following component details.

Margin Details

The system displays the following margin details.

Margin Rates

The system displays the following margin rate details.

6.10.8 Viewing the Syndication Details

To view the details of the syndication, click the ’LS’ tab. The ‘Syndication Details’ screen is displayed, as shown below:

 

In this screen, you can view the reference numbers of contracts created both for the borrower and the participant involved in the syndication.

After you save the contract, you can view the following details of the contract:

6.10.9 Viewing Events for the Participant Contract

You can view the events triggered during the contract life cycle in the ‘Event Log Details’ screen. To invoke this screen, click the ‘Events’ tab. The events defined for the participant tranche/drawdown/facility product will be triggered for the contract.

 

For details on the above screen, refer the heading ‘Viewing events for the facility’ in this chapter.

6.11 Participant Position Summary

You can view the participant position summary in the Participant Position Summary screen.

You can invoke the ‘Participant Position Summary’ screen by typing ‘LBSPTPSN’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

You can view the position details of the participants, for different dates, using this screen. To view details, query using any of the following fields in the Participant Position summary screen:

The following fields are displayed in this screen

You can use this screen to query the details for self-participants and also for external participants.

6.12 Transferring Participant Assets

If you want to make changes in the asset ratio of participants for a borrower tranche or drawdown, use the ‘Participant Transfer Details’ screen. You can invoke the ‘Participant Transfer Details’ screen by typing ‘LBDPTFR’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

The specification for ‘Cascade Participation’ (whether checked or not) defaults from the contract . When you execute a participant transfer at the tranche level and the ‘Cascade Participation’ option is selected for the tranche, the impact of the transfer automatically affects all the drawdowns under the tranche. However, if the option is not selected, you are required to update the underlying drawdowns manually. In this case, only new drawdowns, processed subsequent to the transfer will reflect the changes.

When you specify the transfer percentage for a transfer instruction, the system arrives at the transfer amount based on the existing actual balance as on the value date of the instruction. In this case, it does not consider the impact of the unauthorized PRAM instructions. You cannot authorize a transfer instruction if there are other unauthorized events like CAMD, LIQD, and so on under the tranche/drawdown.

You can perform participant transfers between the booking date and value date of drawdowns under ‘Non- Cascade Participation’ type of tranches. In this case, the value date of the transfer instruction is equal to the value date of the forward dated drawdown. In this screen, you can amend the participant details for a borrower drawdown only if the ‘Cascade Participation’ option has not been set for the underlying tranche. If this option is not selected, you cannot choose the contract reference number of such contracts in this screen, and amendment is not possible.

In case of participant amendments involving PIK components, only the Principal amount should be considered for transfer and the calculated PIK margin should be apportioned among the participants based on the resultant ratio. If you amend the participant details for a borrower tranche that uses a product for which the ‘Cascade Participation’ option has been selected, the changes are applied to all active drawdowns under the tranche. The ‘Cascade Participation’ option is available as part of additional preferences for a borrower product.

In case Sighting Funds is applicable for the contract, then the system does not allow transfer between investors who have pending funding for any of the underlying drawdowns. In addition, the system does not allow participant transfer beyond the latest actual receipt date for any of the underlying drawdowns for the investors involved in the transfer. However, future dated Participant Transfer is allowed on sighting funds enabled tranches only if ‘Part Transfer for FD VAMB/INIT on SF DD’ check box is selected in the ‘Loans Parameters’ screen, and the existing participants in that tranche involved in the participant transfer must be funded till the application date.

For details on participant transfer for sighting funds enabled tranches, refer section ‘Participation Transfer for Sighting Funds’ in this User Manual.

You can differentiate primary transfer and secondary transfer for a participant transfer by selecting the option provided here. In case of Primary Transfer, Transfer fee screen gets disabled in the Participant Ratio Amendment screen and in the Draft Transfer. Transfer Fee Billing screen gets incorporated in the Draft Transfer, however the fee billings or ledger entries will be processed only upon the confirmation of Draft Transfer.

The ledger entries and the corresponding Payment messages are applicable only for the Primary transfers if it is selected for the applicability of ledger entries and the payment messages.

The system triggers the ‘PRAM’ event to propagate the change.

Oracle FLEXCUBE allows you to change the participation ratio at tranche/DD level beyond the liquidation of schedules when there is transfer of shares between participants. If you do any changes to back valued Participant Ratio beyond the last liquidation/schedule date, it results in the change of the scheduled amounts for the affected participants. You need to track the Payables and Receivables for the difference between the old and new amounts for those participants.

Note

Ledger entries posting as part of PRAM/PAMI events is applicable only for Pro-Rata Tranches.

You can use the ‘Participant Transfer Details’ screen for the following purposes:

Addition of new participant is allowed from a facility and is available for the tranches and drawdowns processed under it. When you invoke the screen, the following contract details are available:

When you perform a back value participant transfer and when tranches for which ‘Cascade Participation’ is selected, the following happens:

When you perform a back value participant transfer and when tranche contracts for which ‘Cascade Participation’ is not selected following happens:

You can perform future dated participant transfers for pro-rata tranches. You can specify a future date as the value date for the transfer.

The following table lists out the events associated with future dated participant transfer.

Event

Description

PAMB

Future dated PRAM instruction booking

PAMI

Future dated PRAM instruction Initiation (will happen on value date)

PAMA

Modification of future dated PRAM instruction

PAMC

cancellation of future dated PRAM instruction

 

If any back/current dated activity is performed on a tranche and underlying drawdowns before the value date of the future dated Participant Transfer instruction, the system rebuilds the asset ratio for the future dated transfer.

The following events result in a change in the asset ratio of FD PRAM:

The following events are impacted by future dated Participant Transfers:

If the future dated Participant Transfer instruction is unauthorized you are allowed to perform activities like LIQD, VAMI, and PRAM. If an unauthorized FDPRAM exists along with other unauthorized current/back dated PRAM instructions, authorizationis allowed for the earliest instruction based on the value date.

Note

6.13 Processing Sighting Fund Rollover/Reprice

Future dated participant transfer is allowed on sighting funds enabled tranche when any of the following future dated events exist for Drawdowns under the tranche:

6.13.1 Participant Transfer for Sighting Funds

In the ‘Payment Processing Browser’ screen, the following details are updated for participant transfer with existing participants during participant transfer authorization based on the latest ratio for future-dated events:

For participant transfer with new participants, system adds the new participants to the existing list of participants in the ‘Payment Processing Browser’ screen. The fronting value is defaulted as follows:

For more details, refer section ‘Processing the Release of Payment Messages’ in this User Manual.

6.13.2 Transferring assets between existing participants

To transfer assets from one participant to another, you have to select the reference number of the contract for which you want to initiate the asset transfer amongst the participants.

  1. Enter the Contract Reference Number. You can either enter or select from the option list.
  2. Click ‘Default’ button.The system defaults the contract details.
  3. Click ‘Transfer Details’ tab

You can either click ‘Add Row or ‘Delete Row’ to add or delete participants. The ‘Participant Selection’ screen is displayed.

 

In this screen, you can view the existing participants of the contract.

 

The ‘Participant Transfer Details’ screen displays the following details:

You have the option to capture a consolidated type of transfer instruction or a detailed instruction for each participant. By default, the system takes you to the ‘Consolidated’ tab of the ‘Participant Transfer Details’ screen.

The system ensures the following when you capture the transfer instructions:

6.13.2.1 Capturing Consolidated Transfer Instructions

Select the name of the participants between whom you want to asset transfer in the ‘Consolidated’ tab of the ‘Participant Transfer Details’ screen. For a given value date, you can capture the net amount transferred to and from each participant.

For the participant who is the transferor, specify the amount with a negative sign (to indicate that the transfer is ‘From’ the participant).

Note

The sum of the transfer amount across all participants should be zero.

While maintaining the consolidated transfer instruction, you cannot visit the ‘Detailed’ section of the screen. The system displays the following error message:

Transfer Instruction Type is consolidated. Cannot enter detailed transfer instructions.

Click ‘Save’ to save the transfer details.

 

6.13.2.2 Capturing Detailed Transfer Instructions

To capture individual participant transfer details, check the ‘Detailed ’ section.

Click Participant Details tab and check the Detailed section

 

To transfer assets between participants, you have to select the participants from the ‘Participant Selection’ screen and then specify the following for each:

Transferor/Transfer From

You have to select the participant from whom the asset should be transferred. Upon selection of the participant, the name is displayed in the adjacent text box. The system also assigns a sequence number ‘1’ to the first transferor and this number automatically increments by 1 for every subsequent addition of a transferor.

 

Transferee/Transfer To

You have to select the participant who is receiving the transfer amount. Click ‘Add Row’ button to enable the selection of a transferee. Select a participant from this list.

You may delete a participant(s) if you do you want to include it as a transferee(s). To delete, click ‘Delete Row’ button. However, atleast one transferee is mandatory for a transferor.

Transfer Amount

If you specify the transfer amount, the system computes and display the transfer ratio.

Send Message

Select this check box to indicate if the fax messages have been generated for this participant with the details of the transfer.

For consolidated type billing instruction, you have to define the transfere fee amount against each participant. Transfer Fee amount defined at the Tranche Level is applicable only for the Detailed Transfer Instruction type and not for the Consolidated Transfer Instruction type.

Accounting Entries and messages for the Transfer Fee Billing goes with the Participant Tranche contract Reference number. Accounting Entries and messages for the ledger Entries goes with the Participant Drawdown contract Reference number.

Payment message generation at the tranche level for Transfer fee Billing goes with the settlement days defined for the Transfer fee Settlement currency.

Note

Click ‘Add Row’ button to select the next transferor from the option list provided.

After specifying the changes, click ‘Save’ button to confirm the transfer details. The system arrives at the net of the transferor/transferee amount for each participant and you can view it in the ‘Consolidated’ tab of the screen.

On save of Participant Transfer of a contract, if funding is pending (Fund sighted is No) for any participants involved in transfer, the system provides an override message as shown below.

‘Funding from Participant(s) is pending. Do you want to continue?’

The following details the updated:

6.13.2.3 Capturing Transfer Fee Details

You, as the lead agency, have the option to collect transfer fee for the asset transfer between participants. The fee can be charged to both the transferor and the transferee.

You can collect fee from participants only if fee components are associated with the participant product involved in the contract. In addition, the fee components should be defined with the following attributes:

For details on defining product level fee components, refer the heading ‘Specifying fee components with the product’ in the ‘Defining Products for Loan Syndication’ chapter of this User Manual.

You can capture the fee details in the ‘Transfer Fee Details’ screen. Click ‘Fee’ tab to invoke this screen.

 

You can capture the following transfer fee details in this screen:

Component

The applicable fee components defined for the participant product is available in the option list. You can select one of them to collect the transfer fee. After you select the component, the following details are displayed:

Fee Amount

Specify the amount to be collected as fee. The fee is expressed in the contract currency. This is collected as one time fee and hence requires no schedule definition.

Click ‘Ok’ button to save and exit the screen.

You can use the navigation buttons - in the screen to view the PRAM instructions under a tranche/drawdown.

There is an accounting entry set up at the Participant Drawdown Product for PAMI/PRAM Event to facilitate the ledger entries in case of Primary transfers for the Participant transfer amount captured at the Tranche contract level.

Transferee side accounting entries for PRAM/PAMI Event that would be passed

DR/CR

Accounting role

Amount tag

DR

Customer

Principal_INCR

CR

Syndication pool

Principal_INCR

 

Transferor side accounting entries for PRAM/PAMI Event that would be passed

DR/CR

Accounting role

Amount tag

CR

Customer

Principal_DECR

DR

Syndication pool

Principal_DECR

Note

Ledger entries at the Drawdown level get posted only for the Primary Syndication trans­fers and not for the Secondary Transfers.

6.13.2.4 Operations Allowed on Tranches/Drawdowns with Unauthorized Prams

You can perform the following operations on a tranche/drawdown even if there are multiple unauthorized PRAMs under it:

Saving a tranche/drawdown with multiple PRAMs

The system maintains a sequence in which the transactions (PRAMs) are booked.

Authorizing multiple PRAMs under a tranche/drawdown

Oracle FLEXCUBE authorizes a transaction only if the earlier PRAMs are authorized.

During authorization of the Participant Ratio Amendment, Oracle FLEXCUBE revalidates the tranche availability and if the same is not sufficient to process the transfer, the authorization fails. The system displays an error message to indicate the same.

The PRAM event is triggered only upon successful authorization of the transaction.

Note

‘Contract Authorization possible only after authorizing the overrides’

While authorizing the Participant Transfer an override message is thrown if the flag indicating the Transfer is Participant Transfer.

Do you want to post Accounting entry?

If select yes, a payment to the Transferor’s Standard Settlement appears on the Forward Processor for the full amount of the Transfer. If No is selected payment ledger entry is not posted. The payment message is sent to Forward processing broswser, if the liquidation mode is Semi Auto.

6.13.2.5 Viewing the Participant Details After the Transfer

You can view the new asset sharing ratio and new income sharing ratio for the participants involved in the contract in the ‘Participant Ratio Details’ screen. Click the ‘Participation Details’ tab from Participant Transfer Details screen (LBDPTFR).

 

Payment message generation at the drawdown level for the Ledger entries goes with the Settlement days defined for the respective drawdown currencies. You can view the unique transfer referernce number in the ‘Participant Transfer Details’ screen which is preceded with the Branch code, Product code, and PTFR sequence number.

Note

6.13.2.6 Adding a New Participant

To add a new participant

  1. Enter the Contract Reference Number. You can either enter or select from the option list.
  2. Click ‘Default’ button.The system defaults the contract details.
  3. Click ‘Transfer Details’ tab
  4. Click the ‘Add Row’ from the ‘Existing Ratios’ section and click ‘Default Components’.

You can define the following:

The ‘Participant Transfer Details’ screen looks as shown below:

 

After capturing the necessary details, save and authorize the record. You can then select the tranche processed under the facility (to which new participants have been added) and transfer the assets appropriately between the existing and new participants.

6.13.2.7 Viewing Details of Processed Transfers

You can view all ‘Detailed’ authorized transfer instructions in the ‘Processed Transfer Details’ screen. To invoke this screen, click ‘Processed Transfer’ tab.

 

In this screen, you can view the following details of a transfer transaction:

You can also view the net amount transferred from/to each participant (for ‘Consolidated’ transfer instructions) in the ‘Processed Transfers - Consolidated’ screen. To invoke this screen, click ‘Console Transfer History’ button.

 

The ‘Transfer Amount’ with a negative sign indicates that the transfer is ‘From’ the participant. If the transfer is ‘To’ the participant, the amount will be shown with a positive sign.

6.13.2.8 Viewing Details of Pending Transfers

You also have the facility to view details of all pending transfer instructions in the ‘Pending Transfer’ screen. To invoke this screen, you have to click ‘Pending Transfer’ tab in the ‘Participant Transfer Details’ screen.

 

For each pending transfer, you can also view the net amount transferred from/to each participant in the ‘Pending Transfers - Consolidated’ screen. To invoke this screen, click ‘Console Transfer History’ button.

 

6.13.3 Viewing Participant Margin Details

You can view margin details maintained for participants of the drawdown contract, using the ‘Participant Margin Maintenance’ screen. To view this screen, you have to click the ’Part Margin’ tab.

All details captured in the ‘Margin Maintenance’ screen are defaulted here.

For a given effective date and currency, you can view the margin maintained for the borrowers and participants.

To add a new participant, click ‘Add Row’ and click ‘Default Components’.

The system displays all participants linked to the tranche. You can specify the margin rate applicable for the required participants from the required effective date.

Note that you can maintain margin rates for participants only for margin components of the main interest components of the Tranche’s Drawdown products.

Place your cursor on a participant and click the button to delete that participant.

Click ‘Ok’ button to save the details and exit the screen.

The system will ensure that the total margin rate of all the participants is the same as the borrower margin rate for the effective date for which margin rate is captured/ amended. It will also check the rates for each participant, margin component, currency, effective date and amount slab combination. You should have computed the required margin rates prior to capturing or amending the margin rate using this screen. If the validation for margin rates fails, the system will display an error message and will abort the transaction. You will have to correct the margin rates and then proceed.

If base rate is negative or borrower margin rate is negative then system will not allow user to maintain participant margin. If user has captured positive margin rate for borrower and participant then system will not allow user to amend the margin rate from positive to negative.

The system displays the below error:

Borrower margin is lesser than 0, hence participant margin cannot be captured.

6.13.4 Generating Third Party Faxes

Oracle FLEXCUBE enables you to send faxes to all the participants on Participant transfer (Assignment) Processing with the following details:

After the Participant Transfer is authorized, an override message gets generated for regeneration of Pending Advices. Regeneration of pending advices/notices is for the existing participants with event based notices, event based rate fixing advices and event based payment notices. You can view the list of existing affected participants and advices for the existing affected participants with Pending Status in the ‘Participant Transfer Advice Regeneration’ screen.

You can invoke the ‘Participant Transfer Advice Regeneration’ screen by typing ‘LBDPTADV’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

You can view the following details here:

Generate

The generate box is selected for all the investors and the events for regeneration. However, you can unselect if want it otherwise.

After the generation of selective advices, the status gets updated to ‘Regenerated’ from pending.

Note

Regeneration of Free format is possible only when billing date is in future. The contracts which got the cascade participation are applicable for regeneration. Advices are also re­generated for new participants added as part of participant transfer. The system identifies the events for which advices have to be regenerated based on the advice events whose value dates are greater than the system date. Event value date should be greater than or equal to assignment date for the events other than NOTC and for NOTC it should be great­er than the assignment date.

6.14 Remitting Withheld Tax

Oracle FLEXCUBE enables you to remit the withheld tax amount that was not remitted for a period, to the Central Bank. The tax administrators will review the tax withholdings of all participants at regular intervals. They will select the tax withholdings that need to be sent to the internal Treasury Tax Loan (TTL).

Tax is remitted to the Central Bank using the ‘Tax Remittance’ screen. You can invoke the ‘Tax Remittance’ screen by typing ‘LBDTARMT’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

 

Enter the following details:

Remittance Ref No

For any remittance, you need to click ’New’ from menu. System generates a unique 16 digit reference number and populate the same here. For example, the format of the reference number will be as follows - CT4ZTRM043660065 where;

You can query the remittance made in the past using the remittance reference number.

Tax Payable GL

The tax remitted amount will be credited into this GL account. The option list will display all internal GLs of the branch.

Start Date

Select the date from when you want to remit the tax withholdings. The drop-down list will display all the withholding tax have been booked from this date.

End Date

Select the date till when you want to remit the tax withholdings. The drop-down list displays all the withholding tax have been booked till this date.

Transaction Code

The transaction code you specify here will be used to pass liquidation entries. The option list displays all transaction codes maintained in the ‘Transaction Code Maintenance’ screen.

For more details on transaction codes, refer the chapter ‘Transaction Code Maintenance’ in the Core Services (CS) User Manual.

MIS Group

Select the MIS Group from the list of values. The accounting entries are posted with MIS details associated with the MIS group.

Currency

This is the currency in which the tax that has been withheld needs to be remitted.

Note

System does not post accounting entries or fire events after remitting tax for any LS con­tract.

Once you enter the above details, click the ‘Populate’ button to view details under ‘Contracts for Remittance’. Here, system will display all the withheld tax entries for the specified period in the currency you have selected.

If you change the Start Date, End Date or Currency, you will need to click the ‘Populate’ button to update the details displayed under ‘Contracts for Remittance’.

Contract Ref No.

The reference number of the facility, tranche and drawdown contracts against which the tax was withheld is displayed here.

System displays the tax currency and the total tax amount that was withheld against the participants of the contract. Click ‘Events’ to view the ‘Event Log Details’ screen.

For more details on the ‘Event Log Details’ screen, refer the section titled ‘Viewing events for the facility’ in the ‘Loan Syndication Contracts’ chapter of this User Manual.

You can execute the following operations in the ‘Tax Remittance’ screen:

Note

6.15 Refunding Withheld Tax

Oracle FLEXCUBE enables you to refund the withheld tax amount when there is fluctuation in the interest rate, or change in the tax status. The tax administrators review the previous tax withholdings of all participants and select those withholdings that need to be refunded. System will calculate and refund the total amount to the participants through wire transfer.

Tax is refunded to the participants using the ‘Tax Refund’ screen. You can invoke the ‘Tax Refund’ screen by typing ‘LBDTXREF’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

In the above screen, system displays all the withheld tax components. The following details will be displayed:

Borrower Ref No.

Specify the reference number of the borrower contract for which you want to refund the tax.

Participant

From the option list select the participant for whom you want to refund the tax.

Participant Ref No.

System displays the reference number of the participant.

Tax Rule

System displays the tax rule associated with the contract.

Component

System displays the component against which the tax rule is associated.

Ccy

This is the currency in which the Tax that has been withheld which needs to be remitted.

Refund Amount

This is the sum of all the Refund Amount specified under ‘Schedule Details’.

System will display the schedule details of the components:

Tax Rule

This is defaulted from the Tax Rule under ‘Component Details’.

Tax Due Date

System displays the due date of the component with which the tax rule is associated.

Tax Collection Date

This is the date on which the component was liquidated.

Amount

This is the maximum tax amount that can be considered for the refund for a Tax rule, Due Date and collection date combinations for the given participant of an LS contract. System calculates this amount considering the impact of the past refunds and the remittances.

Refund Amount

You can specify the amount you wish to refund to the participant. You can choose to refund the tax withholdings in partial or full. The amount in the Amount field is defaulted here. You can, however, change the amount. If you specify zero, it indicates that you do not want to refund any amount.

Click ‘Settlements’ tab in the ‘Tax Refund’ screen to invoke the ‘Settlement ’ screen. This screen displays the customer’s account where the refund amount is credited.

Click ‘Events’ tab to invoke the ‘Event ’ screen. This screen displays the accounting entries posted with TXRF (Tax Refund) and TXRV (Reversal of refund) events.

Click ‘Media Priority’ button to invoke the ‘Media for Message Generation’ screen. You can specify the media for the message generation in this screen. This buttonis enabled only if the ‘FpML Type’ option is unchecked at the contract level and the ‘Media Priority’ option is selected at the product level.

If this button is enabled, then the system displays an override message saying to view the ‘Media for Message Generation’ screen. If not, the system handoffs the message as per the details maintained in the ‘Customer Entity Maintenance’ screen.

For more information on ‘Settlement Message Details’ screen, refer the Settlements User Manual.

For more details on the ‘Event Log Details’ screen, refer the section titled ‘Viewing events for the facility’ in the ‘Loan Syndication Contracts’ chapter of this User Manual.

For more information on the ‘Media for Message Generation’ screen, refer the section ‘Specifying Media for Message Generation’ of this chapter.

You can execute the following operations in the ‘Tax Refund’ screen:

Note

6.15.0.1 Forward Processing for Investor Tax Refund Payments

The payments generated or handed off to the investors as tax refunds can be sent for Sanction Check avoiding maker/checker process. You can view the payments and their sanction screening ACK code.

If the option, ‘Forward Processing Required’ in Loans Parameter screen is selected, the system populates the payments details to the forward processing browser, and the full message is sent to Sanction Check system immediately.

If the status from sanction check system is ‘-1’ (Complete) and the INIT/Liquidation mode is selected as ‘Auto’, the tax refund payment from Forward Processing browser is released. And if the INIT/Liquidation mode selected at the contract level is ‘Semi-Auto’, then you have to manually confirm the release of payment message.

Note

Sanction check functionality is applicable only for the new payment messages.

6.15.0.2 Viewing separate fee liquidation entries in Forward Processing Browser

The system supports fee payment messages in modules LB, OL and SLT where the messages are released from ‘Forward Processing browser’. Firstly, the system populates the ADHOC Fee and derived fee payments into Forward Processing browser if the ‘forward processing required’ flag is checked and if fee liquidation mode at the product level is set to the following criteria’s:

You will be able to release the message if the liquidation mode is ‘Semi-Auto’ and ‘Auto’ for derived Fee in LB module. For Adhoc Fee component in LB and OL modules, the system will release the messages based on the sanction check without user intervention

Therefore, in a contract if more than one fee liquidation is performed, on the same value date and for the same currency, ‘Forward processing browser’ contains entries even when multiple fee liquidation are performed for the same reference, Counterparty, value date and currency.

6.16 Processing Back Valued Interest and Fee for Payables and Receivables

Oracle FLEXCUBE recalculates the interest/fee for the paid/liquidated schedule and tracks the payables and receivables for the difference in the interest/fee amounts as a result of:

Note

The recalculation of interest due to change in interest rate happens across all drawdowns which use the modified interest rate code.

Note

To recall, it is through the ‘Floating Rate Code Definition’ screen that you maintain the interest rates, which are updated daily as and when they change.

Refer to the chapter titled ‘Maintaining Floating Rates’ in the Core Services (CS) User Manual for relevant information.

6.16.1 Viewing the Receivables/Payables for a Contract

In Oracle FLEXCUBE, you have the ‘Payment–Receivable Details’ screen through which you can view the receivable/payable amounts for a drawdown. You can invoke the ‘Payable-Receivable Details’ screen by typing ‘LBDPRDET’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

For a drawdown/tranche, this screen displays the receivable/payable amounts for each component and the associated event. Based on the last event which has occurred in the life cycle of the contract, the corresponding event sequence number gets defaulted in the ‘Event Seq No’ field. Once the payable and the receivable amounts are settled across all the components for a particular contract, the system updates the ‘Settled Status’ field to ‘Settled’.

All the components for a contract are displayed in the ‘Component Details’ section.

For each component of the drawdown/tranche, the system displays the following details:

Note

If the tax rules are tagged to the components and if the tax is applicable, the system also passes the necessary accounting entries for tax.

You can use the navigation buttons - provided in the toolbar to scroll through the tranches and drawdowns.

6.16.2 Processing Settlement of Receivables/Payables for a Contract

You can process settlement of a payable/receivable amount in the ‘Payable – Receivable Payment’ screen. Click the ‘Payment’ button to access this screen. This screen shows the amounts payable and receivable for the contract chosen in the ‘Payable – Receivable Details’ screen.

 

The following details are displayed in this screen:

Note

You also have the provision to invoke the ‘Payable-Receivable Payment’ screen directly from the Application Browser. To do so, choose LS Operations and double-click on the Payment option under the Payable Receivable sub-menu. In this case, you need to se­lect the tranche/drawdown from the option list provided. In addition, you need to select the relevant event from the ‘Event Code’ option list provided. The corresponding event se­quence number gets defaulted in the ‘Event Seq No’ field here.

To view the components due for the selected contract, click “Populate’ button. The following details are displayed:

Liqd Reqd

By default, this option is checked for all the participants. However, you can choose to liquidate the payable/receivable amount for selective participants only. To do so, you need to check this option against the appropriate participant (s) and uncheck the same for the others.

Note

The receivables from any party (participant or borrower) should be liquidated in a single instance. For instance, if the amount receivable from a borrower is USD 6000, the same has to be settled entirely including the settlement of individual participant share. Likewise, the amount receivable from participants can be settled individually or with other partici­pants. However, you are not allowed to do a partial liquidation within the individual partic­ipant amount.

Apply Tax

Tax is calculated upfront based on whether tax is applicable for the contract. However, at the time of payment, you can check this option to apply tax on the receivable/payable amount. To waive tax, uncheck this option. Your selection here is updated in the ‘Payable-Receivable Details’ screen.

Click button to move between the ‘Component Details’ and ‘Participant Due Details’ sections of the screen.

After capturing the amounts to be settled against the components, click ‘Save’ to save the payment. Click ‘Exit’ button to exit the screen and return to the ‘Payable-Receivable Details’ screen. The ‘Amount Settled’ field in this screen is updated accordingly.

Note

You can reverse a payment of a payable/receivable by clicking the ‘Reverse’ from the menu. This option is enabled only if you access the above screen directly from the Appli­cation Browser (to do this, you need to choose LS Operations and double click on the Payment option under Receivable Payable.

6.17 Viewing Borrower/Participant Contract Processing Status

You can view the processing status of both borrower and the resultant participant contracts in the ‘JOB PROCESS STATUS’ screen. You can invoke the ‘Participant Exception Log’ screen by typing ‘LBDBPCNT’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

This screen displays all the borrower side contracts (facility, tranche and drawdowns) and the corresponding participant contracts for each borrower side contract.

The following details are displayed for a borrower contracts:

The following details are displayed for a participant contract:

In addition, the ‘Borrower Contract Process Summary’ section of the screen displays the following details:

For each borrower contract, the above details are displayed for the corresponding participant contracts, in the ‘Participant Contract Process Summary’ section of the screen. You can double-click on any contract to view the contract details in the respective contract online screen.

Note

The system displays the processed contracts in ‘Green’ while the contracts that fail are displayed in ‘Red’.

6.17.1 Reinitiating the Job Process

You have the option to reinitiate the ‘Background Job’ on an adhoc basis. This option is available only if the ‘Participant Process’ mode is set to ‘Job’. You have to specify this as part of defining parameters for your branch in the ‘Branch Parameters – Detail View’ screen.

For more details on maintaining branch parameters, refer the heading ‘Creating branches and maintaining branch level parameters’ in the ‘Branch Parameters’ chapter of the Core Services (CS) User Manual.

You can also use the reinitiate Background Job to process the failed contracts after making the necessary corrections. To re-execute the job, you have to click on the ‘Re-Run’ button in the ‘JOB PROCESS STATUS’ screen. The contracts may be processed successfully.

You cannot use the reinitiate option if the ‘Participant Process’ mode is set to ‘Online’ for the branch.

6.18 Maintaining Special Penalty Component Waiver De­tails

You can waive late payment charge schedule(s) for a component using ‘LS Special Penalty Component Waiver’ screen. You can invoke the ‘Special Penalty Waiver’ screen by typing ‘LBDPNWVR’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Specify the following details:

Contract Ref No

Specify the reference number of the contract for which the late payment charge schedules should be waived.

System displays the following details based on the specified contract reference number:

Penalty Comp

Select the penalty component from the adjoining option list. This list displays all the late payment charge schedules for the contract which are not fully paid of waived.

Due Date

System displays the due date for the penalty component selected. However, you can edit the due date.

System displays the following details based on the selected penalty component:

Remarks

Specify a brief description regarding the waiver for late payment charges for a schedule.

Waive

Select this check to indicate that the late payment charge schedule should be waived for a component. You can save the waiver operation only if the ‘Waive’ box is checked for all schedules.

You can waive a partially paid late payment charge schedule. In this case, the unpaid amount is treated as waived and the already paid amount is treated as settled. No further dues are tracked for this schedule.

Before allowing the waiver of each schedule, system checks that all preceding schedules have been paid or waived. If there are any unpaid schedules preceding this schedule, then system displays the following override message:

‘Prior schedules are unpaid for this component. Please pay/waive all such schedules before proceeding’

On waiving a late payment charge, the previously calculated charges are no longer be due.

The accounting entries are posted against the event ‘SPWV’ (Special Penalty Waiver). If multiple schedules are waived as part of the same waiver operation, then system triggers a single ‘SPWV’ event with separate accounting entries for each schedule. The accounting entries are posted for information and tracking purposes only.

6.18.1 Reversing the Waiver of Late Payment Charges

You can reverse the waiver of late payment charges by selecting the original waiver record using the ‘Special Penalty Component Waiver Reversal’ screen. You can invoke this screen by clicking the ‘Reversal’ button in the ‘LS Special Penalty Component Waiver’ screen.

If multiple schedules are waived as part of the original waiver operation, then system allows you to select any or all of such waived schedules for waiver reversal and deselect the ‘Waive’ box. Reversal can be done only if the ‘Waive’ box is unchecked for at least one schedule.

System allows you to undo the waiver operation only if the basis component for the late payment schedule is unpaid/partially paid. If basis component for the late payment charge schedule is fully paid, then you cannot undo the waiver operation.

On waiver reversal, system re-computes late payment charges using values of basis component, grace days and late payment charge fixed rate/flat amount as on the current date. Calculation date is the original schedule due date.

Waiver reversal accounting entries are posted against the event ‘RSPW’ (Reversal of special penalty waiver). If waiver reversal of multiple schedules is performed simultaneously, then system triggers a single RSPW event with separate accounting entries for each schedule. The accounting entries are posted for information and tracking purposes only.

Accrual entries are not passed and late payment charges are booked to P&L only upon liquidation.

Note

At the loan product level, system validates to check that event ‘SPWV’ is mandatorily maintained for a component for which ‘Special Penalty Component’ is checked. System also validates to check that no accounting entries are maintained for the event ‘RSPW’ at the loan product level. System automatically associates the reversal event ‘RSPW’ for such products.

6.19 Viewing the Waiver Details of Special Penalty Compo­nents

You can view current status of all unpaid late payment charge components for a contract using ‘LS Special Penalty Component Waiver Summary’ screen. To invoke this screen, select LS Operations in the Application Browser. Thereafter, select Special Penalty Waiver and then click Summary under it.

In this screen, you can view the following details:

6.20 Netting Cash Flows for a Tranche

You can maintain netting preferences for borrowers and participants of a tranche in the ‘Borrower Details’ sub-screen and the ‘Participant Ratio Details’ sub-screen of the ‘LS Tranche Contract Online’ screen.

For a borrower, you can choose one of the following as the netting preference (in the ‘Borrower Details’ sub-screen of the ‘LB Tranche Contract Online’ screen):

Similarly, for a participant, the following options are available for netting (in the ‘Participant Ratio Details’ sub-screen of the ‘LB Tranche Contract Online’ screen):

You can view the borrower and participant side contracts for a tranche, for which netting is applicable, in the ‘Loans Syndication Netting Cash Flow Summary’ screen.

Netting takes place only if the following parameters for a cash flow are same:

6.20.1 Viewing the Contracts for Netting

In this screen, you can specify the following to view:

6.20.2 Netting the Components

To net the components for a contract, select the contract from the summary screen and double-click on it. The ‘Cash Flow Netting Details’ (LBDNETCF) screen is displayed, as shown below:

 

You can view the following details in the ‘Netting Details’ tab of this screen:

The ‘Other Cashflows’ tab of the screen displays all contracts till date which need to be netted.

You can check the ‘Netted’ option for these contracts if you want to net them along with the current contracts.

After selecting the contracts for netting (in the ‘Netting Details’ tab of the screen), you have to click the ‘Resolve’ button to continue. If pending cashflows are present in the ‘Other Cashflows’ tab, system will display a message to indicate the same. The system will display a message to seek confirmation to resolve the selected contracts. Select ‘OK’ in the message window to continue.

If netting is successful, system will update the ‘FT Contract Details’ section of the screen with the following details:

6.20.2.1 Viewing the Messages

After successfully resolving the netted contracts, you can view the messages in the message details in the ‘Settlement Message Details’ screen.

6.20.2.2 Viewing the Events

You can also view the events triggered for the contracts after netting the contracts. Click the ‘Events’ from LB Tranche Contract Online screen to view the same.

6.21 Free Format Messages for Loan Syndication Con­tracts

You can enable the system to generate free format messages with respect to loan syndication contracts, by using either of the following options:

You can generate free format for multiple participants or borrowers.

6.21.1 Generating Free Format Messages for Multiple Participants

You can invoke the ‘Free format message’ screen by typing ‘OLDFFMSG’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

 

Thereafter, select ‘New’ from the menu. The Free Format Message screen is displayed without any details. Alternatively, you can also select invoke this screen by clicking the ‘PartFFT in the ‘Contract Diary Event’ screen.

When you click on the ‘New’ button, system automatically generates a unique ‘FFMT Reference No’ for the free format message.

6.21.1.1 Specifying Message Details

You have to specify the following in the ‘Message Details’ section of the screen:

Contract Ref No

Select the reference number of the loan syndication contract (facility/tranche/borrower) in respect of which you want to generate free format messages. Upon selection of the contract, system displays the counterparty code and name of the customer involved in the contract. The system also displays the names of participants involved in the contract.

Hold

You have the option to place the free format message on hold. To do this, check this option.

If you have indicated that messages should be generated on-line the free format message is displayed in the ‘Outgoing Message Browser’ once it is saved. You can generate it from the browser. If you indicate that the message should be put on hold, you first have to release the message before you generate it from the ‘Outgoing Message Browser’.

Receiver

You have to select the recipient of the message. The available options are:

Entity Type

If you select the receiver as ‘ENTITY TYPE’, you have to select the type here. The entity types defined for the participants are displayed in the option list. You can select the required type from this list.

The message is sent to only those entities of the selected entity type linked to participant at the facility level.

6.21.1.2 Selecting the Participant(S) for Sending the Message

When you select a syndication contract, the associated participants gets displayed in the ‘Participant Details’ section of the screen. Here, you can select the participant(s) to whom you would like to send the free format message. To indicate you want to send a message to a participant, check ‘Send Message’ against the required participant(s).

By default all the participants are marked for sending the message. However, it is mandatory to capture the message that has to be sent in the ‘Message’ section at the bottom of the screen.

6.21.1.3 Specifying Entity Details

If you specify the ‘Receiver’ as ‘ENTITY’, the entities linked to each participant are displayed in the ‘Entity Details for Participant’ section of the screen. You can indicate the following for the entities:

Media

Indicate the media through which the free format message should be transmitted. The media through which you can channel a free format message depends on the media types that you have maintained for your branch in the ‘Media Maintenance’ screen. You can choose a media code from the option list that is available. For each customer, you can maintain a default media in the ‘Customer Address Maintenance’ screen. The default media is applicable for all the entities under that participant. Hence, you can send the message through different media for each participant simultaneously.

A participant entity for which ‘Send FPML’ option has been selected in ‘Customer Entity Details’ screen, will have the media defaulted as ‘FPML’.

Depending on the media selected, you can capture the message details in the ‘SWIFT’, ‘MAIL’ , ‘TELEX’ and ‘FpML’ tab of the screen.

Primary

By default, one of the entities are designated as the primary entity based on the specification for the participant. You can designate a different entity as the primary entity to receive the message.

Send Message

To instruct the system to send the free format message to the selected primary entity, you have to check the ‘Send Message’ option against the primary entity. However, if the participant of the entity is not marked for sending the message (the ‘Send Message’ option against the participant should be checked), you cannot send a message to the entity.

In this case, system displays the following message:

Since participant is not marked for sending the message, cannot mark entity/entity type for sending the message.

6.21.1.4 Selecting the Type of Free Format Message

You have to indicate the type of free format message that has to be sent to the receiver. The available options are:

6.21.1.5 Capturing the Free Format Message

You can enter the free format message to be sent to the recipient in the ‘Message’ section of the screen. You have the option of using one of the templates that you have maintained in the ‘Message Format Template Maintenance’ screen. To do this, right-click on the screen. The following two choices appear:

Select the option ‘Template Code’.

You can select the template you would like to use. Upon selection of the template, the message is displayed in the box. You can amend the message that gets defaulted from the template. The code of the selected template is displayed in the ‘Template Code’ field.

Note

Although you are allowed to make changes to the message defaulted form the template, these changes does not affect the template itself. You can make changes to a template through the ‘Message Format Template Maintenance’ screen alone.

6.21.1.6 Capturing Details for FpML Messages

You can capture the details of messages in FpML format in the ‘FpML’ tab. For FpML messages, you need to select the message template in the ‘MAIL’ tab inititally. The FPML template to which the MAIL template is mapped gets automatically updated in the ‘FpML’ tab. This value also gets displayed in ‘FpML Template’ field.

Note

If a participant has only ‘FpML’ messages enabled, then you won’t be able to select the message template using ‘MAIL’ tab. In such cases you need to select the FpML template in ‘FpML’ tab.

6.21.1.7 Specifying ‘Custom’ Message Details

The following options are available only if the ‘Message Type’ is ‘Custom’:

Related Event

You have to select the event for which the message should be generated. The events at the product level are displayed in the option list provided. Select an event from this list. When you select the event code, the description is displayed alongside.

6.21.1.8 Selecting Message Tags for the Message

If the Message Type is ‘Custom’, you can include free format message tags for the message, right-click on the ‘Message’ section of the screen.

When you select the ‘TAGS’ button, a list of pre-defined loan syndication module tags will be displayed as shown below:

From this list, you can select the required tags one by one, to be included in the message.

6.21.1.9 Specifying Participant Tag Details

You can specify the message tag details for participants only if the following criteria are met:

You can specify the tag details in the ‘Participant TAG Details’ screen. Click the ‘Tags’ button to invoke this screen.

 

You can enter the values for the tags that you have already selected from the TAG List screen.

Note

Only those Tag IDs that you have defined for the Message Type ‘Custom’ in the ‘Free For­mat Message Tags’ screen is available for use.

If the ‘Message Type’ is ‘Custom, the screen appear, as shown below:

For a ‘Custom’ Message Type, you also have the following option:

6.21.1.10 Viewing the Message Details

After capturing the required message details, you can preview the message. To do this, click the ‘Message Preview’ button.

This screen displays the following details:

Through this screen, you also view the actual format of the message that would be generated. To do this, click the ‘View Message’ button .

Note

In the free format messages for the primary entity, first line of the message will display the borrower/participant name and the second line displays the entity name. In the case of free format messages for non-primary entity, the first line of the message displays ‘Copy - Avoid Duplication’. The second line displays the borrower/participant name and the third line will display the entity name. These positions are fixed and you are allowed to change them.

6.21.1.11 Generating the Message

To generate the ‘Custom’ message, click the ‘Generate’ button in the ‘Free Format Messages – Multiple Participants’ screen.

You can modify the advice details, if required. Click the ‘Ok’ button to generate the message.

After you opt to generate the message, you have the option to cancel the generation of the message. To do this, you have to click the ‘Undo Generate’ button in the ‘Free Format Messages – Multiple Participants’ screen.

Note

For entities having the media as ‘FPML’, FpML notices also get generated in addition to the MAIL notices.

While generating the free format messages for participant, If the ‘FpML Type’ option is checked for borrower tranche / drawdown then the system will do the following:

If the ‘FpML Type’ is not checked, then for free format message, the system does not check the media priority setup.

6.21.1.12 Specifying ‘ProRata’ Message Details

If you select the ‘Message Type’ as ‘ProRata’, you have to specify the pro-rata tag values. To do this, click the ‘Prorata Tag Values’ button in the ‘Free Format Messages – Multiple Participants’ screen. However, you can enter the tag values only if the message is specified in the ‘Message’ section of the screen. If not maintained, the system displays an override to indicate the same.

You can use a template to capture the message format. Refer the heading ‘Capturing the free format message’ in this chapter for details on the same.

6.21.1.13 Selecting Pro-Rata Tags for the Message

When you right-click on the ‘Message’ section of the screen. When you select the ‘TAGS’ option, a list of pre-defined loan syndication module tags will be displayed as shown below:

You can select the required tags one by one, to be included in the message. After selecting the tags, you have to specify the values for the same.

Note

Only those Tag IDs that you have defined for the Message Type ‘ProRata’ in the Free For­mat Message Tags screen is available for use.

6.21.1.14 Specifying Pro-rata Tag Values

You can specify the tag values in the ‘ProRata TAG Values’ screen. To invoke this screen, click the ‘Prorata Tag Values’ button.

 

Specify the following details in the screen:

The system automatically computes the breakup details of the components for the participants based on the amount you enter and the asset sharing ratio. The following details are displayed in the ‘Participant Details’ section of the screen:

Click the button to move from one section of the screen to the other.

6.21.2 Generating Free Format Messages for Multiple Borrowers

You can enable the system to generate a normal advice, as well as custom messages to borrowers through the ‘Free Format – Multiple Borrowers’ screen. You can invoke the ‘Free Format Messages - Multiple Borrowers’ screen by typing ‘OLDFFMBR’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

The details to be captured for ‘Normal’ and ‘Custom’ message types are as explained under ‘Generating Free Format Messages for multiple participants’, the only difference being that you will be capturing the details for ‘Borrowers’ this time. In addition, you have to select the following:

Module

You have to select the module for which the free format message details are being captured. The available options are:

Select ‘LS’ (Loans Syndication) option here to indicate that the messages are being maintained for loan syndication contracts. When a free format message specification is authorized, the pre-defined event for free format messages (ZFFT) is triggered for the contract. The pre-defined tags available for the Loan Syndication module are:

 

6.21.2.1 Specifying Billing Date

You can specify the billing date in the ‘Billing Date’ screen. You can invoke this screen by clicking the ’Billing/Schedule Date’ in the ‘Free Format Messages – Multiple Borrowers’ screen.

Specify the following details:

Billing Date

Specify the date on which the free format message needs to be generated.

Cash Interest Amount

Specify the cash interest amount. If cash interest amount is not zero, then it is mandatory to input cash interest amount at participant level.

6.21.3 Specifying Payment Breakup for Participants

Click ‘Part Int share’ button to invoke the screen, ‘Payment Breakup for Participants’(LBDPYMNT) with details of all the participants under the drawdown and outstanding interest (Cash Interest) for each participant under the field ‘Amount Due’.

 

Refer the section, ‘Specifying Payment Breakup for Participants’ in the Repay Chapter

for more details.

Amount Paid

Specify the individual participant share amount for the interest being paid.

Existing participant free format advices having interest payment details can include cash interest payment that is captured by user during free format message generation (for interest liquidation and principal + interest liquidation).

Rollover notification advices that are generated systematically during rollover booking, can include cash interest payment that is captured by user during rollover booking (for interest liquidation and principal + interest liquidation).

Specify the proper cash amount for borrower and participant during free format message generation and payment should be processed for the same amount which is operationally controlled by user.

Property Code

Select the property code during Payment Notice message generation from the adjoining option list. This list displays only those property codes that are linked to the loan/drawdown selected.

This option list is enabled only if the value of 'Property Selection Required' UDF is 'Yes'. Otherwise, this option list is disabled.

The following UDFs in the 'Message Format Template Maintenance' screen are used for message generation based on the predefined parameters by the user:

UDF

Values

Property Selection Required

Yes/No

Notice Type

Payoff/Payment/Null

If the value of 'Property Selection Required' UDF is 'Yes', then system does the following:

If the value of 'Property Selection Required' UDF is 'No', then system does the following:

The event 'PNTC' is used as a related event to generate the Payment Notice and Payoff Notice for loans and drawdowns. The event 'ZFMG' (Free Format Messaging) is triggered at the contract level for processing free format messages.

The following points on Payment Notice are noteworthy:

Escrow Type

Component

ESC1

Tax escrow component

ESC2

Insurance escrow component

ESC3

Other escrow components

 

While generating free format messages for borrower or participant drawdown contracts, if the UDF value for ‘COMPONENT-TYPE’ at interest class level is ‘SERVICER-FEE’ for payment or rollover notices, then system does the following:

6.22 Processing the Release of Payment Messages

On the booking date of the contract, Oracle FLEXCUBE queues up payments due for the value date and then you can release payment messages based on approvals and /or funds received in the system using ‘Payment Processing Browser’ screen.

You can invoke the ‘Payment Processing Browser’ screen by typing ‘LBDMTPRC’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

You can specify the following fields in this screen:

Contract Reference Number

Specify the borrower contract reference number to capture the fronting/funding details for the disbursement/payment activities of the contract.

The system displays the event wise borrower details for the disbursement and payment events in the Borrower Details frame of this screen.

Borrower Fronting

Select the fronting for the borrower, in case of payment activities, from the following options.

Investor Fronting

Select the fronting for the investor, in case of disbursement activities, from the following options.

Actual Receipt Date

The date on which the borrower is funding for the payment is displayed in this field; however, you can choose to modify this date.

Note

Funds Sighted

Select ‘Yes’ if the fund is sighted for the borrower repayment; otherwise, select ‘No’.

The following fields are displayed in this screen.

Borrower Details

Eventwise Fronting Details

You can capture the investor fronting details for each event in this frame.

Default Investor Fronting

Select any of the following options to indicate the type of participant fronting.

Fronting

Select the fronting for the investor, for the disbursement event, from the following options.

Note the following:

Actual Receipt Date

The actual receipt date is defaulted from Investor wise Funding Details Tab for each Investor; however, you can modify this date. The system uses this date for the interest computation for the investors

Recall Date

In case of Recall for the fronted portion, specify the recall date for Fronted investors for the respective disbursement events.

Note

The following fields are displayed in this frame:

Investorwise Funding Details

Funds Sighted

Select ‘Yes’ to Indicate if the fund is sighted for the Investor for the disbursements.

Payment Date

Specify the date on which the amount is disbursed to the borrower.

Actual Receipt Date

Specify the date on which the investor is funding the amount.

The following fields are displayed in this screen:

Click ‘Funding History’ to display the funding history for the chosen investor in the ‘Funding History’ screen.

 

The following fields are displayed in this screen:

The Payment Processing browser is populated during the participant transfer authorization of future-dated events. This is based on the following conditions:

Click ‘Borrower Payment History’ to display the borrower payment details for the chosen borrower contract for the past disbursement events based on investor funding.

 

The following fields are displayed in this screen:

Borrower Details

Participant Details

6.22.1 Processing Disbursement

On authorization of disbursement events, the system defaults the Payment Processing Browser with the following values:

You have to capture the Fronting Details of Borrower and Participants before proceeding with any other activity. You can query for the borrower contract and unlock it to capture the Fronting and Funding details.

6.22.1.1 Capturing the Fronting Values

Investor Fronting field in borrower details has the options, Fronting All, Fronting Partial and No Fronting for Disbursement Events. Borrower fronting flag is not applicable for disbursement events. Payment date, funds sighted flag and actual receipt date in Borrower details is not applicable for Borrower disbursements

6.22.1.2 Capturing Event wise Fronting Details

Default Investor fronting flag is enabled only if investor fronting is selected as ‘Fronting partial’ in the borrower details. It have the three options, Fronting, Seek Approval and No Fronting

Fronting flag is enabled for Disbursement events and it will have the three options, Fronting, Seek Approval and No Fronting.

If the investor is funding for the disbursement, then the payment date is defaulted from Investor wise Funding Details tab and you are not allowed to modify it.

Actual Receipt Date is defaulted from Investor wise Funding Details Tab for each Investor and you are allowed to modify it. It is not populated until the Fund is sighted for the respective investor.

For the fronted investors, the current application date is defaulted to the payment date on the date of such borrower payments and you are not allowed to modify it.

6.22.1.3 Capturing Investor wise Funding Details

The system updates the Unfunded Amount for each investor after each Disbursement or Repayment. All the fields in Participant Details frame are display fields.

On receiving the funds from an investor, you have to update the Funds Sighted field to Yes for that investor. The current application date is defaulted to the payment date and actual receipt date and you are allowed to modify these dates. The complete unfunded amount is defaulted as the funding amount.

For the fronted investors, it is assumed that the investor has funded and the system populates the funding details internally and the unfunded amount is decreased accordingly. Actual receipt date is updated with the current application date. This update happens at the time of saving the instruction for the current dated or back dated disbursement events. For the future dated disbursement events, this defaulting happens as part of the Beginning Of Day Batch processing.

The system does not allow Partial funding if the funding is due across many disbursement events. The complete amount should be funded when the Fund is sighted for an investor.

Example:

In case the investor has not funded few of the last disbursements, he cannot fund for only the first VAMI while second VAMI is already in place.

If there are multiple investors funding as part of the current activity, then payment date should be the same for all the investors. However, actual receipt date can be different for each investor.

Payment Date/Actual Receipt Date cannot be beyond the latest disbursement event value date. In case if the funding is due across multiple disbursement events for any investors, such investors are expected to fund all the pending disbursements together on or after the latest disbursement event date. (Future dated disbursements are not considered here). Payment date/Actual Receipt date cannot be in the future.

If there are multiple investors funding on the same date for a contract, you should capture the funding details across all investors in a single activity to facilitate the combined payment message to the borrower. However, system allows the user to capture the funding details for various investors on different time period in a day. In such cases, separate payment messages are generated for each distinct funding activity.

Payment date is defaulted to the Payment date in the Event Wise Fronting Details tab and you are not allowed to modify it.

Actual Receipt Date is defaulted to the Actual Receipt date in the Event wise Fronting Details Tab and you are allowed to modify it during subsequent activities.

On saving the fronting details and/or funding details, the system triggers the event ‘SFNT’. If funding details are captured as part of the current instructions, the screen, ‘Payment Details’ is displayed. It shows the funded and fronted amount captured for the current activity.

This screen displays the investor funding details, bank Fronting amounts (If applicable) and also the total amount to be paid to the borrower.

In case of any funding by an investor for whom bank has fronted, the amount is not paid to the borrower; instead it is settled with the bank Sighting Fund GL specified as per the branch parameter setup. Upon confirmation and its authorization in the Payment Processing browser, system populates the new payment infrastructure (if funding details captured for any of the investors).

The event ‘BPMT’ processes the disbursement accounting entries and sends payment messages to the borrower on receiving the fund from the investor(s). This event is triggered on the borrower and affected investor contracts.

It also generates the Payment message for the borrower contract for the funded amount (funded by the investors or Fronted by bank).

In case of backdated and current dated disbursements, the accounting entries and payment messages match with the current application date. In case of future dated disbursements, the accounting entries and payment messages match with the event value date.

The system processes the future dated disbursements (INIT/VAMI) for which the fronting details are captured in advance.

When the funding is done by the Fronted investors, BPMT is triggered for the funded amount, but Payment Message is not generated for the amount which is funded against bank fronted amount.

You can view the borrower payment details by clicking the ‘Borrower Payment History’ button in the Investor Funding Details Tab in the Payment Processing Browser.

You can view the funding details for each investor by clicking ‘Funding History’ in the Investor Funding Details Tab in the Payment Processing Browser.

6.22.1.4 Opting for Recall

In case of Recall for the fronted portion, specify the recall date for Fronted investors for the respective disbursement events.

You can specify the recall date for the latest disbursement event only, the system updates the same recall date for all the previous disbursements. It validates if the Recall date is greater than or equal to the latest disbursement event value Date.

Recall Date is used in Interest Calculation for the borrower and investor. For the borrower, the total recall amount is treated as unfunded from the recall date. For the investor, the amount is treated as unfunded from the value date of the contract itself.

6.22.2 Processing Repayment (LIQD, MRLQ, SPTI, ROLL, FLIQ)

On authorization of repayment events, Payment Processing Browser is populated with the following values.

You have to specify the Fronting Details of Borrower before proceeding with any other activity. You can query for the contract and unlock it to capture the Fronting and Sighting Fund details for the Repayment Event.

6.22.2.1 Borrower Details

Borrower Fronting has the options, Fronting and No Fronting for Repayment Events: Investor fronting is not applicable for repayment events. On receiving the funds from the borrower, you have to update the Funds Sighted field to Yes. The current application date is defaulted to the actual receipt date and you are allowed to modify it.

If bank is fronting or fund is sighted from the borrower, then the current application date is defaulted to the payment date.

You can only view the Investor wise Funding Details tab for Repayment Events since there is no investor funding for the payment events.

6.22.2.2 Payment Process

On saving the fronting details and funding details, system triggers the event ‘SFNT’. On confirmation and its authorization in the Payment Processing browser, system populates the payment infrastructure (if fund is sighted from borrower or if Fronting Option is chosen).

The event ‘PPMT’ processes the payment accounting entries and sends payment messages to the investors. On capturing the details for the repayment event, this event is triggered on the borrower and all investor contracts, if fund is sighted from the borrower or fronting is set to Yes.

The event ‘PPMT generates the Payment message for the Participant contract for the liquidated amount (Pro rata Share of the amount repaid by the Borrower).

In case the investor has not funded at the time of borrower repayment, the payment is not made to such investors and the net unfunded amount is reduced to the extent of expected payment amount for such investors as per their pro rate share.

In case of bank fronting the borrower payment, bank sighting fund GL is debited for the borrower amount and paid to the investors.

Fronting options at the borrower level only governs the payment to the investors and fronting option at the investor level does not have any significance for the borrower payments.

When the borrower payment is funded or fronted, the payment is made to all the investors (if they have fully funded).

In case of backdated and current dated payments, the accounting entries and payment messages match the current application date.

In case of bank fronting the borrower payment, upon fund sighted from the borrower, PPMT is triggered for the funded amount, but payment message is not generated for the amount already fronted by bank.

Multiple payments cannot be funded together. In case of multiple payments being funded on the same date, you have to capture each funding as a separate instruction.

Note

You can view the events, BPMT and PPMT and the corresponding accounting entries and the payment messages through the Events sub screen in the Drawdown/Tranche Contract Online screen.

If fronting details have not been captured for the previous disbursement/repayment event, then the following will not be allowed:

If Overwrite Settlement Instructions is yes at the time of BPMT/PPMT event triggering, accounting entries for BPMT/PPMT events are not passed to Customer Accounts; instead they are passed to the internal GLs mentioned in the Overwrite SI screen for the respective components.

In case if the borrower payment is made in multiple splits (based on number of investors funding), it has multiple BPMT events on different time frames. While triggering each of the BPMT events, the Overwrite SI is checked and accounting entries are passed accordingly.

The payable receivable processing is not be handled for sighting funds.

Sighting Fund Process (PPMT) is applicable for the Fee payments at the Tranche contract level. However, the fee computation remains the same.

6.23 Settlement Instruction Maintenance Information

You can maintain settlement instructions in the Settlement Instruction Maintenance screen.

You can invoke the ‘Settlement Instructions Maintenance’ screen by typing ‘LBDINSTR’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

6.24 Viewing Syndication Contracts

At any point during the tenor (or life cycle) of a syndication contract, you can view its status. You can view the tranche contracts as well as the drawdown contracts, for the borrower and the participants. Summary screens are available listing the currently active contracts entered at each level. These screens can be invoked from the respective contract input screens or from the Application Browser.

6.24.1 Viewing the Automatic Rate Set Browser

You can invoke the ‘Auto Rate Set Browser’ screen by typing ‘LBDRSBRW’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

 

The system automatically process the rate set events for the following events on authorizing the following operations:

While authorizing the future dated transactions, the Rate set browser gets populated with future dated event details with processing status as ‘Unprocessed’.On the Rate Fixing Date, the Rate set event gets processed and the processing status is updated as ‘Processed’/’Failed’ based on the event processing.

If the Rate Set Event is successfully processed, then

The IRAM/ROIX/CRIX/SPIX event is auto authorized if the flag Auto auth Rate fixing events is checked.

The IRAM/ROIX/CRIX/SPIX event is not authorized if the flag Auto auth Rate fixing events is not checked. User have to manually authorize the event

If the Rate Set Event processing is failed, then

The Re-processed event have maker/checker id as below

If Auto Auth Rate Fixing event is Yes, then the User id of who is reprocessing the event is displayed as Maker/Checker ids

If Auto Auth Rate Fixing event is No, then the User id of who is reprocessing the event is displayed as Maker id. Checker will be the approver id

For example,

The USER1 books future dated drawdown and USER2 approves it. On authorization of the future dated drawdown, rate set browser is populated with below details:

If the Rate fixing event is processed automatically on the rate fixing date, below details are updated for the drawdown ref no. and for the main interest combination

The IRAM gets authorized when the flag ‘Auto auth Rate fixing events’ is checked. Else IRAM gets unauthorized and checker id is blank in this case.

In the above example, the USER1 is allowed to delete the unauthorized IRAM event from Interest Rate Fixing Screen when the flag ‘Auto auth Rate fixing events’ is not checked.

Note that on click of ‘Select All’ checkbox. all the unprocessed or Failed records are selected and user is allowed to reprocess all the selected records

You are not allowed to amend the fields in the browser, except the check box to select the event for reprocessing

All the processed records are removed from the browser to history data store. This is a daily activity which is done as part of End of Day process

6.24.2 Automatic Rate Set Process

Auto rate setting process fixes the Base Rate of Drawdown Main Interest component having Rate Fixing Required as Yes for the contract in Agency module of the types:

This is defining the appropriate rate rule through rate setting screen for the above said contracts.

DrawDown Contract Online (LBDDDONL)

If the rates are not available for rate fixing date, then the insertion of Contract Reference Number, Processing Status, Rate Fixing Date Actual, Date, Rate Code, and Rate Fixing Date Used (OLSRATLG) happens in the rate log table. You can either save the contract with 0 rate or with previous rate based on the loan parameters maintained in the ‘Interest Limits Detail’ screen (OLDINTLM).

After saving the contract, if the rates are maintained for the actual rate fixing date in the Floating Rate Maintenance screen (CFDFLTRI), you can run the rate fixing job from ‘Job Processing’ screen (LBSJOBRN). Thereafter, the rate is picked for the actual rate fixing date. and REVN event is fired at the contract level.

Consolidated Rollover (LBDCOROL)

In ‘Consol Rollover Input’ screen, the ‘Rate Fixing Required’ check box and ‘Rate Fixing Days’ are available in ‘Normal’ and ‘Split’ tabs.

‘Rate Fixing Required’ check box is defaulted from the ‘Loan Syndication - Product Definition’ screen (LBDPRMNT) and ‘Rate Fixing Days’ is defaulted from ‘Interest Limits Detail’ screen.

Split Rollover (LBCSPROL)

In Split Rollover screen, the ‘Rate Fixing Days’ is defaulted from the ‘Interest Limits Detail’ screen.

Split Reprice (LBDREPRS)

In ‘Re-price Transaction - Spilt Details’ screen, ‘Rate Fixing Required’ check box is defaulted from Product screen (LBDPRMNT) and ‘Rate Fixing Days’ is defaulted from ‘Interest Limits Detail’ screen.

6.24.2.1 Automatic rate set for Future Dated Transactions

The future dated events, found in the system for the Rate set events pending to be processed. The Job automatically initiates online process on the Rate Fixing Date as soon as the LIBOR Daily rate maintenance is available for the day. The Jobs are automatically started based on the ‘Auto rate set Job start time’ for all the branches. While processing Rate Set Events automatically, the Job skip the contract and proceed with next contract in the below scenarios:

The Rate Set event Processing Date and Value Date should pick the rate from Daily LIBOR Rate, this is always be same which is Interest Rate Fixing Date.

For future dated transactions, Auto Rate Set event is not processed on the rate fixing date, if rate fixing is not done / rate setting rule screen is not visited while capturing the future dated transactions. In addition, User have to visit Rate Setting Rule screen before visiting Rate Fixing screen while capturing the future dated transactions

If Future dated rate setting events pending to be processed on the same day for multiple Drawdown under a tranche and if the flag ‘Auto Auth Rate fixing Required’ is deselected then

You have to manually re-process the failed events individually

6.24.2.2 Automatic rate set for Future Dated Transactions

In system a job processes automatic rate fixing on the Rate Fixing Date and IRAM event is registered for this process. The Base rate is picked up from Daily LIBOR Rate for the Rate fixing date for Drawdown currency and for Interest Rate Period and Rate Code. The System picks the IRFX message template and generates the advice for the IRAM event. If the Rate is input as 0 during future dated Drawdown booking, then the IRFX event is registered but IRFX advice is not generated. The IRAM is processed online once the Job starts processing and also when the rate maintenance available for the Rate fixing date.

If the flag ‘Auto Auth Rate Fixing Events’ is ‘Yes’ at loans parameters screen, then the RAM is auto-authorized with maker/checker as SYSTEM

If the flag ‘Auto Auth Rate Fixing Events’ is ‘No’, then the IRAM is not authorized. The Maker Id for IRAM event is the user id of BOOK event. you are allowed to authorize this event in the existing Interest Rate Amendment Screen.

The Uninitiated Rolled over child contracts will not be considered for automatic rate setting as the you have already captured the Rate Setting Rules during Rollover booking and processing of ROLL event will initiate the Rolled over child contract. You have to manually amend the interest rate through Interest Rate Amendment screen (IRAM), if further amendments required for the Drawdown interest components.

The Job fails the IRAM event if rate maintenance is not available for the day and the appropriate exception is logged saying rate maintenance is not available.

6.24.2.3 Automatic Rate Set Process for Future Dated Split Rollover

The system processes the ROIX on the Rate Fixing Date. The Interest rate is not picked from Daily LIBOR Rate for the Rate fixing date for Drawdown currency, Interest Rate Period and Rate Code. The ROIX get processed online once the Job starts processing and also when the rate maintenance available for the Rate fixing date.

If the flag ‘Auto Auth Rate Fixing Events’ is ‘Yes’ at loans parameters screen, then the ROIX is auto-authorized with maker/checker as SYSTEM. If the flag ‘Auto Auth Rate Fixing Events’ is ‘No’, then ROIX is not authorized. Maker Id for ROIX event is SYSTEM. You are allowed to authorize this event from Drawdown Contract Online Screen

You have to manually amend the interest rate through Interest Rate Amendment screen (IRAM), if further amendments required for the Drawdown interest components. The Job fails the ROIX event if rate maintenance is not available for the day and an Appropriate exception will be logged saying rate maintenance is not available.

6.24.2.4 Automatic Rate Set Process for Future Dated Consol Rollover

The Interest Rate will not be defaulted from Daily LIBOR rate while booking future dated Rollover. The system processes CRIX on the Rate Fixing Date. The Interest rate is picked up from Daily LIBOR Rate for the Rate fixing date for Drawdown currency and Interest Rate Period and for Rate Code. The CRIX is processed online once the Job starts processing and also when the rate maintenance available for the Rate fixing date.

If the flag ‘Auto Auth Rate Fixing Events’ is ‘Yes’ at loans parameters screen, then CRIX is auto-authorized with maker/checker as SYSTEM. If the flag ‘Auto Auth Rate Fixing Events’ is ‘No’, then CRIX is not authorized. Maker Id for CRIX event is SYSTEM. User is allowed to authorize this event from Consolidation Rollover Screen. You have to manually amend the interest rate through Interest Rate Amendment screen (IRAM), if further amendments required for the Rolled over Drawdown interest components. In case of Consol and Split rollover, Rate setting rules should be maintained for each split instruction individually. The Job fails the CRIX event if rate maintenance is not available for the day and an appropriate exception is logged saying rate maintenance is not available.