8.3.11 Rolling Over with Interest Capitalization

Oracle Banking Corporate Lending allows you to perform a Principal + Interest type of rollover for all Normal, Split, Consolidation and Consol + Split methods of rollover. For this, you have to select the Rollover Amount as Principal + Interest in the following screens, depending on the type of rollover you wish to initiate:

• Rollover tab of the Drawdown Contract Online screen
• Split Rollover screen
• Consolidation Rollover screen

If the tranche under which the rolled over drawdown is booked is of non-revolving type, the system initiates a value dated amendment in the tranche to the extent of the capitalized interest. In addition, for rollover with interest capitalization, you cannot create the child contracts in advance. The child contracts are created during rollover processing, on the rollover date.

When you capture rollover instructions with interest capitalization, the system performs the following validations:

• Allows capitalization of interest only for drawdowns under a pro-rata tranches.
• Does not allow capitalization of interest if the drawdown has a PIK component.
• Does not allow capitalization of interest if you have selected Liquidate Interest on Prepayment option for the drawdown.
• In case of Lender of Actuals method of interest distribution, does not allow capitalization if there are PRAMs (Assignments/Trade) present in the corresponding tranche.
• Allows renewals with interest in case of Lender of Record method of interest distribution even if there are PRAMs (assignments) present in the corresponding tranche.

Further, the system also blocks the following activities in the drawdown, if you are capturing P + I instructions:

• Assignments at the linked tranche level where Lender of Actuals option is selected (in the LB Tranche Contract Online screen).
• Rate Revision for the drawdown
• Margin Revision for the drawdown
• Value Dated Amendment