4.9.18.4 Application of Margin Based on Percentage/Amount Utilized
Any change in the tranche utilization amount changes the margin percentage applied on the drawdowns based on percentage/amount utilized. The following example illustrates this:
Example
Whenever you process new drawdown under a tranche, it increases the utilization amount for the tranche. The new marginis applied not only for the new drawdown amount but to the existing drawdowns as well. This means the new margin will be applicable to the tranche outstanding.
Assume that you have maintained the following structure for margin application based on utilization:
Tranche Amount: 10M
Tranche Utilization in % | Margin (%) |
---|---|
< 30 % | 0.00 |
> 30 % to < 70 % | 0.15 |
> 70 % | 0.25 |
Day | DD | Repayments | Outstanding | Applicable Margin (%) |
---|---|---|---|---|
1 | 5,500,000 | 5,500,000 | 0.15 (the DD amount falls in the second slab) | |
10 | 2,800,000 | 2,700,000 | 0.00 | |
45 | 5,000,000 | 7,700,000 | 0.25 (tranche utilization is greater than 70%) |
To amend the details, you have to invoke the Margin Maintenance screen from the Application Browser.
For details on amending the margin, refer the heading Amending the margin details in this chapter.
Parent topic: Maintaining Margin Details