1. Loan Syndication
  2. Loan Syndication Contracts - Part 1
  3. Processing a Draft Tranche Contract

4.8 Processing a Draft Tranche Contract

You can capture the required data and make multiple changes to them before actually creating an original tranche contract. You can make changes to the contract details as needed, save it as a draft, and then create the final tranche contract from the saved details.

A Draft Tranche screen is created where the below mandatory details are captured.
  • The facility contract under which the draft tranche is created.
  • Tranche Product
  • The Counter Party
  • Currency and Tranche Contract Amount
  • Maturity Date, DD Expiry Date
  • Drawdown details
The unique reference number for the contract is automatically generated once the tranche product is entered. The Value Date and Original Start Date are defaulted to the branch date and can be modified if needed.

Other details like Preferences, Holiday Treatment for Schedules, and so on are defaulted from the tranche product which is entered as part of the mandatory details.

In addition, data entered in the below tabs is used to call other sub systems and capture information for the tranche.
Tab Description
Schedules Specify the schedule dates for the contract.
Currency Specify the exchange rate fixing/interest rate fixing details and holiday currencies.
Borrower Specify the details of the borrowers, settlement sequences and entity details.
Participants Captures the details, SSI Mnemonics, entities and component ratios for participants in the contract.
DD Product Specify the Drawdown Product details.
Tranche Schedule In case of non revolving tranche, mention the repayment schedules.
Party Type Captures the different types of entities or parties that are applicable for the contract.
Fees Displays the default fee details for the product and also captures the fee schedules if any.
Errors View the error codes any error messages if any at the time of creating the Tranche from the Draft Tranche.
The Draft Tranche screen offers flexibility to make multiple changes any number of times to the data and save it as a draft. It does not require a value dated amendment to change the data. The main tranche contract is created from the draft anytime, once the data to be processed is finalized. The Draft Tranche screen does the necessary data validations and ensures that multiple tranche contracts are not created for the single draft.
This topic contains following sub-topics:

Parent topic: Loan Syndication Contracts - Part 1