4.7.2 Drawdown Contracts
After the tranche level commitment contracts and the drawdown schedules have been entered, the arranger bank typically disburses the loans to the borrowing customer, against the Reference Number of the borrower tranche contract as well as the Reference Number of the main facility contract; and according to the drawdown schedule defined for the tranche. The borrower loan contract constitutes the borrower leg of the processing for drawdowns.
- The participants involved in the drawdown. The participants defined for the borrower tranche will default to the drawdown. You can change the participants, if required. Upon change of participants, the system will 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 Cascade Participation attribute of the tranche.
- The ratio of participation. Again, the ratio specified for the participants defined in the borrower tranche defaults to the drawdown. If you change the ratio, 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.
- The borrower details.
After you have entered a borrower drawdown contract, when the BOOK event of the contract is triggered, the system automatically initiates deposit contracts for the participants. These contracts constitute the participant leg of the processing of the drawdown. They are linked to the respective commitment contracts created at the tranche level.
Parent topic: Processing Loan Syndication Contracts