1.1.6.1 Processing Tranche
When you open a tranche under a syndication contract, you input a commitment contract for the borrowing customer. Based on this, the system creates a commitment contract for each of the participants.
The borrower tranche contract involves the borrower tranche product that you have defined. The participant commitment contracts involve the participant commitment products you have defined.
Though the tranche contracts may involve different products, all the contracts involved in a particular tranche are processed simultaneously.
The tranche contracts may be revolving or non-revolving, according to the requirement of the borrower. In a revolving commitment, the commitment amount is reinstated when it is fulfilled. Therefore, the commitment amount pledged to a borrower is reinstated once the drawdown loan availed has been repaid by the borrower. If the commitment is non-revolving, the commitment amount is not reinstated on repayment of the drawdown loan availed.
Parent topic: Processing Tranche or Draw Down Contracts