2.1.1 Create Covenant Linkage

This topic describes the systematic instructions to create the covenant Linkage.

  1. On Homescreen Menu, click Covenants and Conditions under Covenants and Conditions, click on Covenant Linkage.Under Covenant Linkage, click Create Covenant Linkage.
    The Create Covenant Linkage screen displays.

    Figure 2-1 Create Covenant Linkage


    Description of Figure 2-1 follows
    Description of "Figure 2-1 Create Covenant Linkage"

    Note:

    • Click Add Existing Covenant, all fields are auto populated on selecting a covenant code which is fetching from existing covenant.
    • Click Add Bespoke Covenant, the user has to specify all the fields manually.

    For RSO Covenant Details, additional placeholder fields can be configured in Maintenance screen. For more information on managing these placeholders, refer to the Maintenance User Manual.

    The system supports configuration of up to 20 fields each for the following data types:
    • Text
    • Numeric
    • Boolean
    • Date

    Each field type allows a minimum of 0 and a maximum of 20 fields per Covenant details, based on the requirements. These fields displays in the Covenant Details screen only if they are configured. If no additional fields are defined, the screen will display only the standard covenant details fields.

    For example, we maintained 20 additional fields each for text, numeric, boolean, and date.

    The Create Covenant Linkage screen displays.

    Figure 2-2 Create Covenant Linkage


    Create Covenant Linkage

    Note:

    Additional fields are application if switch is Credit Data Required is set to 'Y'.
  2. Click Search.
    The Covenant Code screen displays.

    Figure 2-3 Covenant Code


    Description of Figure 2-3 follows
    Description of "Figure 2-3 Covenant Code"

  3. The user can select a covenant from the covenant code LOV and link it to a customer, facility, or collateral by selecting the appropriate linkage type from the drop-down in the linkage section and click Fetch.
    The Create Covenant Linkage screen displays.

    Figure 2-4 Create Covenant Linkage


    Description of Figure 2-4 follows
    Description of "Figure 2-4 Create Covenant Linkage"

    For more information on fields, refer to the field description table.

    Table 2-1 Create Covenant Linkage from Existing Covenant

    Field Description
    Convenant Code Select the LOV to get the covenant from maintenance .
    Covenant Name Displays the name of the covenant.
    Covenant Description Specify the covenant description.
    Classification Type Display the Classification type of the covenant. This field is auto populated on selecting a covenant. The available options are:
    • Internal
    • External
    Covenant Type Display the type of the covenant. The available options are:
    • Financial
    • Non-Financial

    Note: If Add Bespoke Covenant is selected, by default Non-Financial option displays only if Has Sub Covenants toggle enables.

    Covenant Sub-type

    Display the sub type of the covenant. The available options are:

    • Asset Sale Covenants
    • Preservation of Collateral/Seniority
    • Reporting and Disclosure
    • Operating Activity
    • Cash Payout Covenants
    • Management, control and ownership
    • Investment expenditure
    • Document Covenants
    • Others
    • Stock Statement

    Note: All covenant sub-type options displays, if Non-financial is selected as a covenant type.

    Covenant Reason Select the covenant reason from the drop-down list. The available options are:
    • Maintenance
    • Restrictive
    Linkage Category Displays the linkage category.

    Note: This field displays if Add Bespoke Covenant is selected.

    Has Sub Covenants Enable the toggle to add the sub covenants inline.

    Note: This field is displayed only if Add Bespoke Covenants is selected.

    Compliance Rule Select the covenant reason from the drop-down list. The available options are:
    • All Met
    • Any Met
    • Majority Met

    Note: This field is populated if Has Sub Covenants toggle is enabled.

  4. Click Tracking period Details.
    The Tracking period Details screen displays.

    Figure 2-5 Tracking Period Details


    Description of Figure 2-5 follows
    Description of "Figure 2-5 Tracking Period Details "

    For more information on fields, refer to the field description table.

    Table 2-2 Tracking Period

    Field Description
    Tracking Frequency Select the frequency in which the covenant has to be tracked periodically. The available options are:
    • Weekly
    • HalfYearly
    • Quarterly
    • Monthly
    • Fortnightly
    • Custom
    • Yearly
    This field is auto populated on selecting a covenant code.User can modify it for the current linkage.
    Notice Days Select the notice days.

    This field is to capture the number of days before the next due date, covenant tracking has to be triggered and notified to the customer.
    Start Date Select the start date.
    End Date Select the end date.
    First Review Date Displays the first review date.
    Grace Days Displays the Grace days.
  5. To capture the monitoring information for the covenant, click and expand Monitoring Information Details section.

    Figure 2-6 Monitoring Information Details


    Description of Figure 2-6 follows
    Description of "Figure 2-6 Monitoring Information Details"

    Note:

    The Monitoring Information Details section displays, if Covenant Type is selected as Financial from the drop-down list.
  6. Click Formula Details.
    The Formula Details screen displays. This section is applicable only for Financial Covenants.

    Figure 2-7 Formula Details


    Description of Figure 2-7 follows
    Description of "Figure 2-7 Formula Details"

    For more information on fields, refer to the field description table.

    Table 2-3 Formula Details

    Field Description
    Formula Displays the formula for the tracking of financial covenant. This field is auto populated from maintenance on selecting a covenant code.
    Target Type Specify the target type of the values.This field is auto populated from maintenance on selecting a covenant code.The available options are:
    • Ratio
    • Percentage
    • Amount
    Covenant Check Condition Specify the target condition. This field is auto populated from maintenance on selecting a covenant code.

    The available options are:

    • Greater than
    • Greater than or equal to
    • Less than
    • Less than or equal to
    • Equal to
    • Between
    Currency Displays the currency of target value.This field is applicable if Target Type is Amount.
    Target Value 1 Specify the target value. This field is auto populated from maintenance on selecting a covenant code.
    Target Value 2 Specify the target value. This field is auto populated from maintenance on selecting a covenant code. This field is applicable only if check condition is Between.

    Note:

    The Formula Details section displays, if Covenant Type is selected as Financial.
  7. Click Generate Schedule.
    The Schedule Details screen displays.

    Figure 2-8 Schedule Details


    Description of Figure 2-8 follows
    Description of "Figure 2-8 Schedule Details"

  8. Click Revise target.
    The Revise Target screen displays.

    Figure 2-9 Revise Target


    Description of Figure 2-9 follows
    Description of "Figure 2-9 Revise Target"

    For more information on fields, refer to the field description table.

    Table 2-4 Revised Target

    Field Description
    Start Date Specify the start date.
    End Date Specify the end date.
    Revision Target Value Specify the revision target value to be revised for the selection revision period.
    Is Waived? Specify the waive tp schedules which is under the given revision date range.
  9. Click Linkage Details.
    The Linkage Details screen displays.

    Figure 2-10 Linkage Details


    Description of Figure 2-10 follows
    Description of "Figure 2-10 Linkage Details"

    For more information on fields, refer to the field description table.

    Table 2-5 Linkage Details

    Field Description
    CustomerLinkage Rnable the customer linkage toggle.
    Customer Number Specify the customer number.
    Customer Name Specify the customer Name
    Linkage Type Select the linkage type from the drop-down list. The available options are:
    • Customer
    • Facility
    • Collateral
    Customer ID Select the customer ID. If it is a customer linkage, the customer ID is directly assigned to this field and the field is disabled.
    Facility ID Specify the Facility ID and Linkage Entity Id of the linkage. The facility can be filtered in the LOV using Line code of the facility.
    Collateral ID Specify the Collateral Id as Linkage Entity Id of the linkage. The Collateral can be filtered in the LOV using Collateral Id.
    Collateral Asset ID Specify the Collateral Asset Id as linkage subtype Id.
  10. Click Sub Covenant Details.
    The Sub Covenant Details screen displays.

    Figure 2-11 Sub Covennat Details


    Description of Figure 2-11 follows
    Description of "Figure 2-11 Sub Covennat Details"

    For more information on fields, refer to the field description table below.

    Table 2-6 Sub Covenant Details

    Field Description
    Covenant Linkage ID Click search and fecth the linkage ID of the covenant.
    Covenant ID Displays the covenant ID.
    Covenant Name Displays the covennat name.
    Covenant Description Displays the covenant description.
    Covenant Type Displays the covenant type.
    Frequency Displays the frequency.
    Compliance Status Displays the status of the covenant.
  11. Click Save to update the modified fields and click Cancel to cancel the modified fields.
  12. The main covenants section displays in subcovenants after linking the subcovenants to main covenant.
    The Main covenant screen displays.

    Figure 2-12 Main covenant


    Description of Figure 2-12 follows
    Description of "Figure 2-12 Main covenant"

Parent topic: Covenant Linkage