6.2.3 Participation Sell where Bank as Lead Agent

As part of STP processing from agency to agency wrapper, a new wrapper contract is created with the sell participation trade amount as on the sell participation settlement date for the first participation sell trade.

For a first time participation sell for a CUSIP, bank selling to external counterparty, system creates an agency wrapper tranche with the following inputs:

• The buyer of the Participation as the participant.
• The trade amount as on the Participation sell settlement date as the Tranche amount.

It also creates a new facility contract for the Agency Facility amount where the Facility start date and end date is same as the agency facility start and end dates.

You have to maintain the product details to map the agency product to wrapper product. Otherwise, the agency wrapper contract uses the same product and expense code as of the main agency contract for Facility/Tranche/Drawdown.

Figure 6-6 TLS- LB Interface Browser

Description of "Figure 6-6 TLS- LB Interface Browser"

Following details are displayed in TLS- LB Interface Browser (TLDLDIFB) screen.

• Agency details like the agency reference number, currency, event sequence number, and event code.
• Participant contract details like the contract reference number and processing date.
• Corresponding agency wrapper details like the wrapper reference number, event sequence number, event code, expense code, product code, and processing status

During LB-wrapper Handoff, the processing status can have any of the following values.

• Extracted – Indicating that handoff has not yet started.
• Handoff – Indicating that handoff is in progress.
• Failed – Indicates that Handoff has been failed due to error which can be viewed in error log.
• Processed - Indicates that Handoff has been successful.
• Reprocess – Indicates the handoff has been marked for reprocess for the specified trade after doing the necessary correction at agency level.

Using this screen, you can unlock the failed record and change the processing status from Failed to Reprocess and save for ones which have failed during Agency to wrapper handoff.

You can unlock the failed record and click Mark Handoff to change the processing status from Failed to Handoff. This is applicable only for failed records.

You can view the exception log associated with a contract by using the Exception Details section.

If the agency wrapper contract for the Silent participant and CUSIP combination is available with a positive tranche balance, then STP of the PRAM from the agency contract is done to the agency wrapper contract as a NPVAMI to increase the wrapper contract amount and add the buyer/increase the pro-rata share for the buyer of the silent sell participation.

Settlement party for the agency wrapper contract is the silent participant id that has been used for the trade processing in the agency contract.

The STP processes are as follows:

• If the wrapper contract is not available, the system creates a drawdown contract, in addition to the wrapper tranche, under the agency wrapper for each of the active drawdown. The drawdown amount is the outstanding amount as per the pro rata share of the sell participation trade amount in the main drawdown as on the date of the participation sell.
• If there is any current dated principal payment/repayment on the agency drawdown contract, STP of principal payment is done on the agency drawdown wrapper contract. If the principal and interest are paid as part of single payment at drawdown level, only the principal payment is STPed to the wrapper contract and interest payment is handled manually.
• If there are any current dated VAMI on drawdown and agency Tranche, STP of those events are done to the agency wrapper contract. Value dated amendment of amount change and maturity change is handled.
• If there are any future dated VAMI in the drawdown and agency tranche, the corresponding VAMI event is handed off to wrapper during the batch processing on the value date of the VAMI.
• If there are any back-dated activities beyond any other activity and other events, STP is not handled. Only STP of normal back-valued (which is not beyond any activity) is done to wrapper contract.

Before processing the STP to the wrapper, system performs the basic contract balance (Principal) validations. In case of any exceptions, system does not proceed and the event is in Failed status. No validation is done for interest/fees.

Events prior to the current event of the same contract should be in processed status.

If there is any subsequent Participation sell after all the participations are elevated, you need to manually update the position in the existing wrapper contract by initiating the NP VAMI for the new trade amount at the tranche level and NP VAMI at the drawdown level based on the pro-rata share of the drawdown in the tranche.

If there are any subsequent sell Participation trade with the same external counterparty or with new external counterparty, system triggers Non pro rata VAMI to increase the wrapper contract amount on the wrapper tranche and wrapper drawdown.