4.9.17.1 Selecting Borrower Drawdown Products

To process drawdowns under the tranche, you have to select the drawdown product at the tranche level. The option list displays all drawdown products that you have associated with the facility product (under which the parent facility contract is processed) through the Borrower Facility Product – Preferences screen.

When you select the product, the following details are displayed:

• Description of the DD product
• Select Allow Ratio Change check box if you want specify the participant ratio change in Loan Syndication - Contract Payment screen (LBDPYMNT).
• Components associated with the product: Component Type, Name, and Description.
• List of participants
• Participant Income Ratio for each component: This gets defaulted based on the asset ratio/amount specified in the Participant Ratio Details screen. You can change the Income ratio, if required. The new value will get defaulted to all drawdown contracts processed under the product.

Interest Rate Rounding Rule

Select the interest rate rounding rule from the adjoining drop down list. Select one of them from the drop down list:

• Down
• Upto
• No rounding
• Manual

The rounding rules applied for the interest rate picked up automatically during Drawdown transactions are given below:

• If the Round Rule Method is chosen as Manual, then you have to specify the interest rate manually.
• You are allowed to amend the Interest Rate Rounding Rule for tranche even after the tranche is authorized. CAMD event is registered for this amendment.
• The new Drawdowns that are booked after the amendment and existing Drawdowns continue with the Interest Rate Rounding rule available at the Drawdown contract level.
• If interest rate rounding rule is maintained for the Drawdown product at tranche level, then the system follows the rate setting rule and automatic rate setting happens. If there is no maintenance for Rate setting rule at the tranche level for any Drawdown product then the system does not follow the rate setting rules and user have to manually input the rates for the underlying Drawdown contracts