1.9 Participant Drawdown
Use Participant Drawdown process, a non-agency process in which the agent submits the Drawdown notice to Lender to arrange the funds on a certain date.
Lender bank performs due diligence on the drawdown notice and if satisfied, then proceed is send to agent on the given date.
The process flow for Participant Drawdown undergoes goes the below stagesī
- Entry
Lender captures the funding requirement and perform the due diligence on the Drawdown notice received in form of PDF from the agent. In addition, lender also verifies if all the Condition precedent is satisfied. Further Condition precedent and Drawdown Condition have been satisfied.
- Verification
Data gathered in the previous stage along with facility and tranches booked in system are checked and verified. If data input is not correct, then the verifier can reject the application or send it back for correction. If the verifier is satisfied with all the data, then lender signs the reply slip and send to agent through fax or an email. In case of any discrepancy, lender reverts to agent for more details or move to next stage.
- Treasury Rate
As Lender bank is also lending to the deal and has to cover exposure, then for the same amount treasury ticket to be booked. Treasury reference number and rate are captured.
- Enrichment
Under this stage, bank can configure additional data segment which are required.
- Exceptional Compliance Approval
In case of Drawdown, a Sanction check is performed on borrower. If any hits are found, then compliance approval can be obtained.
- Approval
Post all the above step, application will land into the final approval. After the approvals, cash is remitted to the agent, before currency cut off.
Parent topic: Loans Syndication