9.4 Downsizing Tranche for an Investor’s Default
If there is an investor default in due course of time, you have to manually initiate a tranche downsize to the extent of the defaulting investor’s contribution.
To facilitate this, Non-Prorata VAMI with negative amount is enabled when sighting funds is applicable and the tranche is of lead type.
The non-prorata VAMI is then propagated to the drawdowns to propagate the revised ratios along with the reduction in drawdown amount.
System shows an override message if the Tranche down size is happening for an investor who has fully funded. System does not capture any information on investor defaulting.
In case of value dated amendment, the VAMI amount is expected to be funded by those investors who have funded completely for the previous disbursement events.
The system throws an override during save of VAMI to state this validation.
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