1. Loan Syndication
  2. Loan Syndication Contracts - Part 1
  3. Processing Loan Syndication Contracts

4.7 Processing Loan Syndication Contracts

After you enter a borrower facility contract into Oracle Banking Corporate Lending, you need to:
  1. Open a tranche for the borrower.
  2. Create a drawdown for the borrower when a drawdown is requested, and as soon as intimation is received from the participants, indicating that their commitment has been fulfilled and the funds have been credited to the nostro account of the arranger (your bank).
A drawdown loan can be entered for the borrowing customer on each of the schedule dates that are specified according to the borrower’s requirement. The arranger bank typically checks to ensure that all the necessary formalities have been completed, and any necessary documents required to be furnished by the borrower have been received, before entering a drawdown loan.

The participants make their contributions available in their vostro accounts, from where the funds are drawn into the common syndication pool, and then to the account of the borrower, when a drawdown loan is entered.

The system therefore processes the borrower facility contract in two stages:
  1. Processing the tranches
  2. Processing the drawdowns
The system also processes two different types of contracts when it processes a borrower facility contract:
  1. Those related to the borrower. These include the main syndication agreement facility contract, the borrower commitment that you enter when you open a tranche, and any borrower drawdown loan that you enter under a tranche. These contracts constitute the borrower leg of the borrower facility contract.
  2. Messages to the borrower are generated and transmitted through the borrower leg.
  3. Those related to the participants. These include the participant facility contracts, tranche commitments or drawdown deposit contracts that are initiated by the system when the BOOK event for the corresponding borrower contract is triggered. These contracts constitute the participant leg of the facility contract.
This topic contains following sub-topics:

Parent topic: Loan Syndication Contracts - Part 1