4.9.7 Specifying Interest/Fee Distribution Method

You can indicate the method in which the interest and fee components have to be distributed among the participants when an assignment is executed before the liquidation date.

• Lender of Actuals - System distributes the interest and fee components based on the old participant ratio for the period before the Participant Ratio Amendment Date (PRAM Value Date) and the new ratio for the period after the PRAM value date.
• Lender of Record - System distributes the interest and fee components among the participants based on the latest participant ratio available at the time of liquidation.

Note:

• Once the tranche contract has been authorized, you cannot change this option.
• For all drawdown contracts associated with the tranche, this option gets defaulted. However, you cannot change the defaulted distribution type at the drawdown level.
• Payable and Receivable tracking is applicable only for Lender of Actuals type of distribution.
• You are allowed to make all Back dated changes only after the last Liquidation date or last Schedule date for Lender of Record type of Distribution. Back Valued changes includes events such as PRAM, VAMI, MRFX, REVN.
• During STP processing, the system checks for the availability of the Tranche participant and Commitment for the corresponding participant.
• For pro-rata tranches, the participant balance is calculated based on the borrower balances and the participant ratio is on the respective event date, whereas, for of non pro-rata tranches, system considers the participant balances directly from participant balance tables and compare it with the commitment for the position validation activities.
• During interest calculation and accrual processing, the system arrives all in rate as zero if all in rate is negative. All in rate gets displayed as zero in the existing all in rate field in the screen.
• The system does not accrue with interest amount in negative. If the interest was accrued with positive interest rate and later all in rate is changed to zero due to negative rates then, the interest does not get accrued from the interest amendment date.
• If the interest rate amendment is done effective back dated then the system recalculates the accrual by taking all in rate as zero from the amendment date along with the back dated interest amendment process.