TRM CLM User Guide

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Wall Street Systems – Empowering Treasury Trade and Settlement

Wallstreet Suite
Commercial Loans Module (CLM)
User Guide
Version 7.3.14

Information in this document is subject to change without notice and does not represent a commitment on the part
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© Copyright 2011 Wall Street Systems IPH AB. All rights reserved.
First Edition (April 2011)
This edition applies to Wallstreet Suite version 7.3.14 and to all later releases and versions until indicated in new
editions or Wall Street Systems communications. Make sure you are using the latest edition for the release level of
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Company names, people names, and data used in examples are fictitious unless otherwise noted.

Contents

Preface ...........................................................................................................................11
Intended audience and prerequisites ......................................................................................... 11
Associated documents ................................................................................................................ 11
Change history: ............................................................................................................................ 11

1 Overview ....................................................................................................................13
1.1 CLM ........................................................................................................................................ 13
1.1.1 Defining contracts in CLM ............................................................................................... 13
1.1.2 Arranging credit in CLM .................................................................................................. 13
1.1.3 Structuring of loan products in CLM ................................................................................ 13
1.1.4 Capturing and processing drawdowns in CLM ............................................................... 14
1.1.5 Processing loan events in CLM ...................................................................................... 14
1.1.6 Monitoring credit and debt situations in CLM .................................................................. 14
1.1.7 Receivables management in CLM .................................................................................. 14
1.1.8 Managing messages in CLM .......................................................................................... 14
1.1.9 Information used in CLM ................................................................................................. 15
1.2 Applications of CLM ............................................................................................................. 15
1.2.1 Editors ............................................................................................................................. 15
1.2.2 Managers and Boards ..................................................................................................... 15
1.2.3 Monitors .......................................................................................................................... 15
1.2.4 Reports ........................................................................................................................... 16
1.2.5 Activities .......................................................................................................................... 16
1.3 Setting up and using CLM .................................................................................................... 16

2 Managing static data .................................................................................................19
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9

Setting up static data for CLM ............................................................................................. 19
Schedule templates .............................................................................................................. 19
Instrument groups ................................................................................................................ 20
Instrument types ................................................................................................................... 21
Instruments ............................................................................................................................ 21
Transaction templates .......................................................................................................... 22
Facility types ......................................................................................................................... 23
Facility templates .................................................................................................................. 24
Facilities ................................................................................................................................. 24
2.9.1 Defining the main attributes ............................................................................................ 25

Commercial Loans Module (CLM) User Guide

2.9.2 Defining contract details .................................................................................................. 26
2.9.2.1 Defining credit amount details .............................................................................. 27
2.9.2.2 Defining drawdown currency details ..................................................................... 28
2.9.2.3 Defining counterparty details ................................................................................ 28
2.9.2.4 Defining payback FX rate details .......................................................................... 29
2.9.2.5 Defining location details ........................................................................................ 29
2.9.2.6 Defining owner details .......................................................................................... 29
2.9.2.7 Defining instrument and event details .................................................................. 30
2.9.2.8 Defining funding type details ................................................................................ 30
2.9.2.9 Defining tranche details ........................................................................................ 30
2.9.2.10 Defining transaction template details .................................................................. 31
2.9.2.11 Defining beneficiary details (optional) ................................................................. 32
2.9.2.12 Defining guarantor details (optional) ................................................................... 32
2.9.2.13 Defining sublimits (optional) ............................................................................... 32
2.9.2.14 Defining drawdown condition details (optional) .................................................. 33
2.9.2.15 Defining collateral agreement details (optional) ................................................. 34
2.9.2.16 Defining drawdown parameter details (optional) ................................................ 34
2.9.2.17 Defining mandate details .................................................................................... 35
2.9.2.18 Defining switches details .................................................................................... 35
2.9.2.19 Defining properties details .................................................................................. 35
2.9.2.20 Defining links details ........................................................................................... 36
2.9.2.21 Defining ad hoc message client details .............................................................. 36
2.9.2.22 Defining contact rule details ............................................................................... 36
2.9.3 Approving facilities .......................................................................................................... 36
2.9.4 Modifying facilities ........................................................................................................... 37
2.9.5 Mirroring facilities ............................................................................................................ 37
2.9.5.1 Setting up facility mirroring ................................................................................... 37
2.9.5.2 Approving mirror facilities ..................................................................................... 39
2.9.5.3 Modifying mirror facilities ...................................................................................... 39
2.10 Tranches .............................................................................................................................. 39
2.10.1 Defining the main attributes .......................................................................................... 40
2.10.1.1 Single tranches ................................................................................................... 40
2.10.1.2 Multiple tranches ................................................................................................ 40
2.10.2 Defining the tranche values .......................................................................................... 40
2.11 Approvals (optional) ........................................................................................................... 41
2.12 Funding types (optional) .................................................................................................... 42
2.13 Mandates (optional) ............................................................................................................ 43
2.13.1 Defining the main attributes .......................................................................................... 43
2.13.2 Defining mandate participant details ............................................................................. 44
2.13.3 Defining mandate funding details .................................................................................. 45
2.14 Cashflow groups (optional) ................................................................................................ 46

3 Managing amount events .........................................................................................49
3.1 Amount Event Manager ........................................................................................................ 49
3.1.1 Amount Event Manager menus ...................................................................................... 49
3.1.1.1 View ...................................................................................................................... 49
4

3.1.1.2 Command ............................................................................................................. 50
3.1.1.3 New ...................................................................................................................... 50
3.1.2 Start-up parameters ........................................................................................................ 50
3.1.3 Customizing Amount Event Manager ............................................................................. 50
3.2 Processing amount events .................................................................................................. 50
3.2.1 New subsidy estimation .................................................................................................. 50
3.2.2 New credit amendment ................................................................................................... 53
3.2.3 New credit transfer .......................................................................................................... 55

4 Managing drawdowns ...............................................................................................59
4.1 Drawdown Manager .............................................................................................................. 59
4.1.1 Drawdown Manager menus ............................................................................................ 60
4.1.1.1 View ...................................................................................................................... 60
4.1.1.2 New ...................................................................................................................... 60
4.1.2 Start-up parameters ........................................................................................................ 60
4.1.3 Customizing Drawdown Manager ................................................................................... 60
4.2 Processing drawdowns ........................................................................................................ 61
4.2.1 Entering drawdown transactions ..................................................................................... 61
4.2.2 Approving drawdown transactions .................................................................................. 64
4.2.3 Pricing drawdown transactions ....................................................................................... 65
4.2.3.1 Pricing rate renewal or indexation ........................................................................ 66
4.2.3.2 Loan pricing simulation ......................................................................................... 67
4.2.4 Cancelling drawdown transactions ................................................................................. 67
4.3 Drawdown mirroring ............................................................................................................. 67
4.3.1 Setting up static data for drawdown mirroring ................................................................. 67
4.3.2 Processing drawdown mirroring ...................................................................................... 67
4.3.2.1 Generating drawdown mirroring ........................................................................... 68
4.3.2.2 Executing loan events on mirrored drawdowns .................................................... 68
4.3.2.3 Rejecting mirrored drawdowns ............................................................................. 68

5 Managing loan events ...............................................................................................69
5.1 Setting up loan events .......................................................................................................... 69
5.1.1 Action rule types ............................................................................................................. 70
5.1.1.1 Types of loan events ............................................................................................ 71
5.1.2 Action rules ..................................................................................................................... 72
5.1.2.1 Setting up action rule conditions ........................................................................... 73
5.1.2.2 Defining the action rule actions ............................................................................ 74
5.1.3 Enabling loan events on transactions ............................................................................. 75
5.2 Processing loan event actions ............................................................................................ 75
5.2.1 Commitment fees ............................................................................................................ 76
5.2.1.1 Setup .................................................................................................................... 76
5.2.1.2 Execution .............................................................................................................. 76
5.2.1.3 Generated data ..................................................................................................... 77
5.2.1.4 Updating commitment fees ................................................................................... 77
5.2.2 Conditional remunerations .............................................................................................. 78
5.2.2.1 Setup .................................................................................................................... 78
Commercial Loans Module (CLM) User Guide

5.2.2.2 Execution .............................................................................................................. 78
5.2.2.3 Generated data ..................................................................................................... 79
5.2.3 Deferment commission ................................................................................................... 79
5.2.3.1 Setup .................................................................................................................... 79
5.2.4 Drawdown amendment ................................................................................................... 79
5.2.4.1 Setup .................................................................................................................... 80
5.2.4.2 Execution .............................................................................................................. 80
5.2.4.3 Generated data ..................................................................................................... 86
5.2.5 Drawdown classification .................................................................................................. 87
5.2.5.1 Setup .................................................................................................................... 87
5.2.5.2 Execution .............................................................................................................. 87
5.2.5.3 Generated data ..................................................................................................... 88
5.2.6 Due amount carry forward .............................................................................................. 88
5.2.6.1 Setup .................................................................................................................... 88
5.2.6.2 Execution .............................................................................................................. 88
5.2.6.3 Generated data ..................................................................................................... 89
5.2.7 Facility fees ..................................................................................................................... 89
5.2.7.1 Setup .................................................................................................................... 90
5.2.7.2 Execution .............................................................................................................. 90
5.2.7.3 Generated data ..................................................................................................... 90
5.2.8 Prepayments ................................................................................................................... 91
5.2.8.1 Setup .................................................................................................................... 91
5.2.8.2 Execution .............................................................................................................. 91
5.2.8.3 Generated data ..................................................................................................... 94
5.2.9 Late Payment Penalties .................................................................................................. 95
5.2.9.1 Setup .................................................................................................................... 96
5.2.9.2 Execution .............................................................................................................. 98
5.2.9.3 Generated data ..................................................................................................... 98
5.2.10 Loan pricing .................................................................................................................. 98
5.2.10.1 Setup .................................................................................................................. 99
5.2.10.2 Execution ............................................................................................................ 99
5.2.10.3 Generated data ................................................................................................... 99
5.2.11 Write off ......................................................................................................................... 99
5.2.11.1 Setup .................................................................................................................. 99
5.2.11.2 Execution ............................................................................................................ 99
5.2.11.3 Generated data ................................................................................................. 100
5.2.12 Rate Renewal ............................................................................................................. 101
5.2.12.1 Setup ................................................................................................................ 101
5.2.12.2 Execution .......................................................................................................... 101
5.2.12.3 Generated data ................................................................................................. 102
5.3 Editing loan events ............................................................................................................. 102

6 Managing equity ......................................................................................................103
6.1 Setting up equity in the facility .......................................................................................... 103
6.2 Processing equity investments ......................................................................................... 104
6.2.1 Entering new equity investments .................................................................................. 104
6.2.2 Entering equity divestments .......................................................................................... 104
6

6.2.3 Capturing dividend events ............................................................................................ 104
6.2.4 Capturing other corporate actions ................................................................................. 105

7 Managing issued guarantees .................................................................................107
7.1
7.2
7.3
7.4

Setting up issued guarantees ............................................................................................ 109
Processing issued guarantees .......................................................................................... 110
Processing guarantee calls ................................................................................................ 110
Processing guarantee refunds .......................................................................................... 111

7.5 Processing actions on issued guarantees ....................................................................... 113

8 Monitoring loan activity ..........................................................................................115
8.1 Monitoring debt positions .................................................................................................. 115
8.1.1 Debt Monitor ................................................................................................................. 115
8.1.1.1 Debt Monitor menus ........................................................................................... 116
8.1.1.2 Start-up parameters ............................................................................................ 116
8.1.2 Monitoring debt flows .................................................................................................... 116
8.1.2.1 Defining position parameters .............................................................................. 117
8.1.2.2 Selecting axis (column and row) groupings ........................................................ 119
8.1.2.3 Configuring axis values ...................................................................................... 120
8.1.2.4 Selecting key-figures in Debt Monitor ................................................................. 120
8.2 Monitoring credit positions ................................................................................................ 121
8.2.1 Loan Monitor ................................................................................................................. 121
8.2.1.1 Loan Monitor menus ........................................................................................... 121
8.2.1.2 Start-up parameters ............................................................................................ 122
8.2.2 Monitoring credit flows .................................................................................................. 122
8.2.2.1 Defining query parameters ................................................................................. 122
8.2.2.2 Configuring Loan Monitor ................................................................................... 123
8.3 Querying loan activity ......................................................................................................... 123
8.3.1 Loan Manager ............................................................................................................... 123
8.3.1.1 Loan Manager menus ......................................................................................... 124
8.3.1.2 Start-up parameters ............................................................................................ 124
8.3.1.3 Customizing Loan Manager ................................................................................ 125
8.3.1.4 Configuring default settings ................................................................................ 125
8.3.2 Initiating loan activities from Loan Manager .................................................................. 125
8.4 Managing payment reminders ........................................................................................... 127
8.4.1 Payment Reminder Manager ........................................................................................ 127
8.4.1.1 Payment Reminder Manager menus .................................................................. 127
8.4.2 Processing payment reminders .................................................................................... 128
8.4.2.1 Retrieving payment reminders ............................................................................ 128

9 Managing payment advices ...................................................................................129
9.1 Payment Advice Manager ................................................................................................... 129
9.1.1 Payment Advice Manager menus ................................................................................. 129
9.1.1.1 View .................................................................................................................... 129
Commercial Loans Module (CLM) User Guide

9.1.1.2 Command ........................................................................................................... 130
9.1.1.3 New .................................................................................................................... 130
9.1.2 Start-up parameters ...................................................................................................... 130
9.1.3 Customizing Payment Advice Manager ........................................................................ 130
9.2 Processing payment advices ............................................................................................. 130
9.2.1 Entering payment advices ............................................................................................. 130
9.2.2 Approving payment advices .......................................................................................... 131
9.2.3 Editing imported SWIFT payment advices .................................................................... 131

10 Managing payment allocations ............................................................................133
10.1 Payment Allocation Manager ........................................................................................... 133
10.1.1 Payment Allocation Manager menus .......................................................................... 133
10.1.1.1 View .................................................................................................................. 133
10.1.1.2 Command ......................................................................................................... 134
10.1.1.3 New .................................................................................................................. 134
10.1.1.4 Options ............................................................................................................. 134
10.1.2 Start-up parameters .................................................................................................... 135
10.1.3 Customizing Payment Allocation Manager ................................................................. 135
10.1.4 Configuring payment allocation ................................................................................... 135
10.1.4.1 Auto match criteria ............................................................................................ 136
10.1.4.2 Auto match amount tolerances ......................................................................... 136
10.1.4.3 Auto match tolerances ...................................................................................... 137
10.1.4.4 Cashflow group priorities .................................................................................. 137
10.1.4.5 Default query offsets ......................................................................................... 138
10.2 Processing payment allocations ..................................................................................... 138
10.2.1 Retrieving cashflows and payment advices ................................................................ 139
10.2.2 Grouping cashflows and payment advices ................................................................. 139
10.2.3 Automatic payment allocation ..................................................................................... 139
10.2.4 Approving payment allocations ................................................................................... 140
10.2.5 Manual payment allocation ......................................................................................... 140
10.2.6 Retrieving payment allocations ................................................................................... 141
10.2.7 Unallocating payment allocations ............................................................................... 141
10.3 Processing underpayments and overpayments ............................................................ 141
10.3.1 Processing underpayments ........................................................................................ 142
10.3.1.1 Carry forward .................................................................................................... 142
10.3.1.2 Leave unallocated ............................................................................................ 143
10.3.1.3 Accept as Profit/Loss ........................................................................................ 144
10.3.1.4 Unallocate Cashflows ....................................................................................... 145
10.3.2 Processing overpayments ........................................................................................... 145
10.3.2.1 Offset future cashflows ..................................................................................... 145
10.3.2.2 Leave unallocated ............................................................................................ 146
10.3.2.3 Refund payment ............................................................................................... 147
10.3.2.4 Accept as Profit/Loss ........................................................................................ 147

Appendix A: Features ............................................................................................................149
A.1 Categories of features ........................................................................................................ 149
8

A.2 List of features .................................................................................................................... 149
A.2.1 Add Facility Guarantees ............................................................................................... 149
A.2.2 Allow Drawdown FX Freeze ......................................................................................... 150
A.2.3 Allow Funding Call ........................................................................................................ 150
A.2.4 Allow Guarantee ........................................................................................................... 150
A.2.5 Allow Revision .............................................................................................................. 150
A.2.6 Allow Subsidy Call ........................................................................................................ 151
A.2.7 Cancel Provisional Settlements .................................................................................... 151
A.2.8 Commercial Loan ......................................................................................................... 151
A.2.9 Conditional Remuneration ............................................................................................ 151
A.2.10 Continuation Aggregated Rate Function .................................................................... 152
A.2.11 Payment Amount Extraction ....................................................................................... 152
A.2.12 Deferment Commission (Setup) ................................................................................. 152
A.2.13 Drawdown Amendment .............................................................................................. 152
A.2.14 Drawdown Cancellation .............................................................................................. 153
A.2.15 Drawdown Classification ............................................................................................ 153
A.2.16 Drawdown Fee ........................................................................................................... 153
A.2.17 Drawdown Fixing ........................................................................................................ 154
A.2.18 Drawdown Prepayment .............................................................................................. 154
A.2.19 Drawdown Rescheduling ............................................................................................ 154
A.2.20 Due Amount Carry Forward ........................................................................................ 154
A.2.21 Edit Commitment Fee ................................................................................................. 155
A.2.22 Guarantee Call ........................................................................................................... 155
A.2.23 Guarantee Refund ...................................................................................................... 155
A.2.24 Guarantee Valuation ................................................................................................... 155
A.2.25 Insert Default Guarantees .......................................................................................... 156
A.2.26 Late Payment Penalty ................................................................................................ 156
A.2.27 Late Payment Penalty Realization .............................................................................. 156
A.2.28 Loan Pricing ................................................................................................................ 156
A.2.29 Off Balance Sheet Accounting (Facility) ..................................................................... 156
A.2.30 Risk Venture Capital ................................................................................................... 157
A.2.31 Write Off ..................................................................................................................... 157

Appendix B: Loan event parameters....................................................................................159
B.1 Commitment Fee ................................................................................................................ 159
B.2 Conditional Remuneration ................................................................................................. 159
B.3 Deferment Commission ..................................................................................................... 160
B.4 Drawdown Amendment ...................................................................................................... 160
B.5 Drawdown Cancellation ..................................................................................................... 161
B.6 Drawdown Classification ................................................................................................... 162
B.7 Drawdown Fee .................................................................................................................... 162
B.8 Due Amount Carry Forward ............................................................................................... 162
B.9 Facility Fee .......................................................................................................................... 163
B.10 Funding Call ...................................................................................................................... 163
B.11 Guarantee Call .................................................................................................................. 163
Commercial Loans Module (CLM) User Guide

B.12
B.13
B.14
B.15
B.16

Guarantee Refund ............................................................................................................ 164
Late Payment Penalty ...................................................................................................... 164
Prepayment ....................................................................................................................... 164
Rate Condition .................................................................................................................. 166
Write-Off ............................................................................................................................ 168

Appendix C: Activity parameters..........................................................................................169
C.1
C.2
C.3
C.4
C.5
C.6
C.7
C.8

CLM Bulk Drawdown Amendment .................................................................................... 169
CLM Fixing Drawdown Cashflow ...................................................................................... 170
CLM Late Payment Penalty Generation ............................................................................ 170
CLM Late Payment Penalty Realization ............................................................................ 170
CLM Late Payment Reminder Generation ........................................................................ 171
CLM Payment FX Rate Generation ................................................................................... 171
CLM Payment Reminder Generation ................................................................................ 172
CLM Subsidy Call Follow-up Generation ......................................................................... 172

Preface

This guide describes how to use the Wallstreet Suite Commercial Loans Module (CLM): it provides
information that applies solely to commercial loans and using CLM.
It explains how to use CLM to set up, manage, and process commercial loans, monitor loan
positions, manage loan events, and so on.
CLM is used in conjunction with the Wallstreet Suite Transaction & Risk Management Module (TRM).
Therefore, this guide does not describe setting up procedures or management processes that are
also found in TRM. For this information, refer to the TRM end-user documentation.

Intended audience and prerequisites
This guide is intended for CLM users responsible for one or more of the following tasks:

•

Setting up and managing CLM-related static data

•

Capturing and processing drawdowns on commercial loans

•

Monitoring credit and debt situations

•

Managing and reconciling loan receivables.

Before reading this guide, some prior knowledge and experience of TRM is beneficial.

Associated documents
This guide is supported by the following TRM end-user documentation:

•

TRM User Guide

•

TRM Instruments: Processing and Calculations.

Other associated documents can be accessed from the Help menu of the Wallstreet Suite’s
applications.

Change history:
Edition

Date

Changes

Updated By

0.1

April 2011

Initial release 7.3.14

TRM Dev Team

Commercial Loans Module (CLM) User Guide

Chapter 1

Overview

This chapter introduces you to CLM and the tasks required to set up and use the module.

1.1 CLM
CLM enables financial institutions and corporate treasuries to manage the whole life cycle of
commercial lending in the same system as their borrowing and treasury activities.

1.1.1 Defining contracts in CLM
In CLM, it is possible to enter the key attributes of a loan contract under a facility agreement.
You can define contractual conditions in the facility. These conditions can then be used to validate a
loan at the time of disbursal, thereby reducing operational risk and making the process more
efficient.
It is also possible to define whether the credit is sanctioned as being of a revolving or non-revolving
nature.
The Loan Officer can also record the decision of the Credit Committee in an approval, and record the
details of any subsidy limits in a mandate. These details can then be checked when entering the
facility agreement.

1.1.2 Arranging credit in CLM
In CLM, it is possible to arrange a credit line under a facility agreement in multiple ways: the credit
line can be disbursed using a combination of tranches and sublimits within each facility. This allows
you to control and monitor the available credit very effectively.
Amendments made to the facility (for example, cancellation of the credit line, a change in the
available credit, a credit transfer, a new borrower, or changes to the type of interest rate), can also
be processed and monitored in CLM.

1.1.3 Structuring of loan products in CLM
CLM caters to a whole range of loan structures – from simple fixed and floating rate loans, to
extremely complex structures, as follows:

•

Fixed, floating, annuity, revisable, and structured complex loans

•

Collateralized loans and asset-backed loans

•

Issued guarantees and subsidized loans

•

Private equity

•

Parallel and sequential amortization and interest schedules.

The system provides unlimited drawdown structuring to allow sophisticated inter-company and
external lending activity.

Commercial Loans Module (CLM) User Guide

1 Overview
1.1 CLM

1.1.4 Capturing and processing drawdowns in CLM
A drawdown transaction is used to transfer funds between the lender and borrower.
A drawdown has the following characteristics: it is always entered under a facility and a tranche; it
uses a transaction template to default the schedule structure; and it has a process flow (from
contract setup, to the processing of transactions, and finally to payment reconciliation) that allows
the organization to validate the entries through a chain of departments or users.
The predefined transaction and schedule templates are used to automatically enter common
disbursal information at drawdown entry. CLM then retrieves data from the facility or tranche and
completes all of the contractual fields that it can using the predefined information from the
templates. In the simplest case, only a small amount of data, such as the drawdown’s amount,
value date, and maturity date, remains to be entered.
CLM verifies the information and immediately issues an appropriate warning or error message if the
facility’s credit limit, sublimit, or any of its drawdown conditions are violated.
Drawdowns then pass through a user-configurable transaction flow where the data can be checked
by additional users, and other details added (such as, settlement instructions).

1.1.5 Processing loan events in CLM
Facilities and drawdowns can be long term, and CLM helps control and manage events that may
occur during the life-time of the loan contract.
The events managed in the system include such events as the following: the ability to add a variety
of fees (such as commitment, late penalty, or cancellation fees); early repayment of the debt, either
fully or partially; amendments to the drawdown (for example, change in currency, interest rate
type, borrower, or loan structure); automatic pricing of the drawdown; automatic or manual fixing
of rates; and re-classification, or even a total write-off, of the remaining debt.

1.1.6 Monitoring credit and debt situations in CLM
In CLM, the credit situation for a loan agreement can be monitored using a configurable Loan
Monitor application in order to view limit utilizations and cashflows grouped by borrower, facility, or
drawdown.
For example, in this monitor, you can view the following figures: total credit sanctioned under the
agreement; utilized credit under a contract, and the remaining available credit. Additionally, you can
view the use of the sublimits set up under the facility.
The debt situation, for example, the amounts due from a borrower or for a contract, can also be
monitored in CLM in another type of monitor application.
These due amounts may be the result, for example, of the normal repayment of loans, the interest
due on loans, or they may arise from the payment of fees, commissions, and so on, that are due to
various events that occur during the life-cycle of the loan.
In these monitors, the information is updated in real-time and takes into account the other CLM
operations.

1.1.7 Receivables management in CLM
Payment reconciliation in CLM allows you to track, monitor, and reconcile payments against loan
receivables.
Furthermore, the system will automatically generate payment reminders to borrowers before each
payment date: these are both printable and transmissible, for example, by E-mail, Fax, or Telex.

1.1.8 Managing messages in CLM
Commercial lending operations involve extensive communications between lenders and borrowers.

1 Overview
1.2 Applications of CLM

CLM supports the generation of standard loans documents, such as, Billings, Rate Renewals, and
Statements of Commissions. These documents or messages can be produced either as part of the
transaction flow or on a nightly basis.

Note: Managing messages is described in the TRM User Guide.

1.1.9 Information used in CLM
CLM uses the same types of information found in TRM:

•

Static data information

•

Market data information

•

Transaction management information

•

Calculated information.

See the TRM User Guide for more information.

1.2 Applications of CLM
This section gives an overview of the different types of CLM applications, and how you use them
depending on your position in the organization.
All types of application are described in detail in the TRM User Guide.

1.2.1 Editors
Editors are used to define the static data information (for example, facility and tranche entities) that
needs to be set up before CLM can be used.
Editors for CLM are defined from a layout based on the Static Data Editor application. Each editor
layout is available as an individual application in CLM.

1.2.2 Managers and Boards
In CLM, there are a number of manager applications (based on the same layout as TRM’s
Transaction Manager) that are used to manage the flow and acceptance process of different types of
information in the system.
Different modes of each manager can be configured to be used for a particular purpose or to display
information in a particular state in its process flow. Each manager mode is available as an individual
application in CLM. Permissions are set up and applied to users to limit their access to different
manager modes according to their responsibilities within the organization.
Drawdown Manager (used to capture and process drawdown transactions) and Drawdown Action
Manager (designed specifically for loan events on drawdown transactions) are examples of these
types of manager applications.
In CLM, there are also several types of Board applications: for example, Enter Board, which is
available in the Drawdown mode of the manager application, offers a simplified alternative for
entering drawdown transactions.

1.2.3 Monitors
Monitors consist of pages, often grouped into books, which display information in grids and charts.
In Loan Monitor, you can view limit utilizations grouped by facility, tranche, or sublimit.

Commercial Loans Module (CLM) User Guide

1 Overview
1.3 Setting up and using CLM

Debt Monitor is a version of TRM’s Treasury Monitor that is designed specifically for monitoring the
debt situation, for example, the amounts due from a counterparty, under a facility or for an
individual drawdown.

1.2.4 Reports
Reports display information which is generated from the information provided by other applications.
You can create different types of reports: such as reports listing your data and position-related
reports.
You can also perform a variety of calculations on the data in a report, such as calculations that are
not available in other applications. You can add, multiply, subtract and divide totals, calculate
averages, produce subtotals at any grouping level, produce running totals, combine the output of
different columns, and create sophisticated “if” conditions for displaying and calculating data.
You can create as many different report layouts as you need (either completely new ones, or ones
based on existing layouts).
Reports are set up and managed in an application called Report Generator.

1.2.5 Activities
Some calculations and batch processes must be run on certain dates or at certain time intervals (for
example, daily or monthly). These calculations and batch processes are called activities and you can
set them up to run automatically.
You can use activities to perform a variety of tasks, such as running batches and generating log
reports, fixing cashflows, creating messages such as payment reminders, updating modified data in
the system automatically, and various other calculations and realizing of key-figures.
Activities are managed and launched from an application called Activity Manager.

1.3 Setting up and using CLM
As a user, you are responsible for one or more of the following tasks:
Task

More information

Set up the module:

Chapter 2 Managing static data on page 19

•

Set up loan data.

Monitor changes to the credit amount:

Chapter 3 Managing amount events on page 49

Capture activity:

Chapter 4 Managing drawdowns on page 59

•

Use the module to process and manage
drawdowns.

Chapter 5 Managing loan events on page 69

•

Managing equity in drawdowns

•

Managing late payment penalties

Monitoring activity:
•

Monitor debt flows

•

Monitor credit positions

•

Querying loan activity.

•

Managing late payments

Receivables management.

Chapter 6 Managing equity on page 103

Chapter 8 Monitoring loan activity on page 115

Chapter 9 Managing payment advices on page 129
Chapter 10 Managing payment allocations on page 133

1 Overview
1.3 Setting up and using CLM

Task

More information

Reference data and parameters.

Appendix A Features on page 149
Appendix B Loan event parameters on page 159
Appendix C Activity parameters on page 169

Commercial Loans Module (CLM) User Guide

1 Overview
1.3 Setting up and using CLM

Chapter 2

Managing static data

In addition to the static data that is common to other modules (such as, currencies and portfolios),
you also need to set up the static data required for the management of commercial loan
agreements.
This chapter describes the procedures for setting up and managing the static data required for a
loan agreement in CLM.

Note: For more information about setting up and managing both CLM-related and other types of
static data, refer to the associated TRM end-user documentation: see Associated
documents on page 11.

2.1 Setting up static data for CLM
The order for setting up static data for CLM is dependent on the restrictions of assigning one entity
to another and the interdependencies between them. For this reason, the order in which you create
static data is very important: in some cases, you may need to create static data in parallel.
The order in which static data entities are described in this chapter reflects the order you need to set
them up: for example, setting up a transaction template is described before setting up a facility,
since you need to define the transaction template before you can assign it to the facility.

2.2 Schedule templates
A schedule can drive the generation of the cashflow structure of a drawdown (for example, the
interest flows) and also the generation of transaction events (such as fixing rates for dual-currency
structures) which may be required throughout the life of a commercial loan.
Schedules contain a number of values that determine how the cashflows or events of these
instruments are generated.
There are two types of schedule template: Primary and Secondary.

•

Primary templates consist of the primary schedules. They define the main cashflow structure of
the drawdown. It is possible to supplement the primary template using secondary templates.

•

Secondary templates consist of add-on schedules. They can be attached to one of the primary
schedules and are then dependent on that primary schedule.

CLM is delivered with a set of Primary and Secondary system-defined templates: the available
schedules are listed in the guide TRM Instruments: Processing and Calculations.
Once you have identified the primary schedule you need, you can attach one or more secondary
schedules to the template and store it with its own ID.
Schedules are defined in Schedule Template Editor.
Schedule templates can be organized into groups according to their category or function in Schedule
Template Group Editor.

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2 Managing static data
2.3 Instrument groups

Schedules can be used together with transaction templates (see 2.6 Transaction templates on page
22) to propagate key values into a transaction at drawdown entry. In Drawdown Manager, it is also
possible to dynamically add schedules directly to a drawdown transaction.
To define a schedule template:
1. In Schedule Template Editor, select the system template on which you want to base your own
schedule from the left part of the editor.
2. Define the main attributes of your own schedule template in the upper part of the editor.
Information

Description

ID & Name

Unique ID and name for the schedule template.

User / System

Identifies the template as system-defined or user-defined.
Note: System-defined templates provide a starting point for creating user-defined
templates.

Primary /
Secondary

Identifies the template as primary or secondary.
Primary user-defined templates can be used in transaction templates and
transactions, while secondary templates can be attached to one or more of the
schedules in either a primary or a secondary template.
Note: Secondary templates cannot be used independently with transaction templates
or transactions.

Payment Adjust
Method

Defines whether the schedule template can be seen and used in the Payment Adjust
Method field in the transaction schedules.

3. In the Schedule Template Item page, define the parameters for the schedule.
For information about the parameters that can be entered to define a schedule, see the guide
TRM Instruments: Processing and Calculations.
4. In the Groups page, select and add the schedule template group or groups to which you want this
schedule template to belong.
Schedule template groups are described in the TRM User Guide.
5. Save the whole schedule template using File - Save As New.

2.3 Instrument groups
Each instrument is assigned to an instrument group during the setup process. Groups are used as a
means of identifying instruments and can be used in CLM to restrict the availability of instruments in
drawdown entry using transaction templates.
Instrument groups are arranged into a simple hierarchy, where each group is assigned one parent.
Instruments can only be assigned to a single instrument group in the hierarchy.
The first level of the instrument group hierarchy is predefined in the system, but can be modified at
implementation according to your organization’s requirements. You then create further instrument
groups for the lower levels of the hierarchy to reflect the requirements of your organization.
Instrument groups are defined in Instrument Group Editor: see the TRM User Guide for more
information.

2 Managing static data
2.4 Instrument types

2.4 Instrument types
Instrument classes denote the different categories of instruments which are supported by the
system. They are predefined in the system and cannot be changed by the user.
Classes are used as a basis on which to define instrument types. Once instrument types have been
defined, the instrument classes are no longer used.
An instrument type inherits all the features contained in the instrument class automatically.
Features are system-defined attributes used to give instruments their distinctive functionality and
enable drawdown entry, amount and event processing, and position monitoring.
Commercial loan instruments must be based on an instrument type derived from the class
COMMERCIAL-LOAN.
Instrument types are defined in Instrument Type Editor: see the TRM User Guide for more
information.

2.5 Instruments
All instruments share several main characteristics and are set up in a similar way in Instrument
Editor.
The specific instrument setup required for a particular category of instrument is explained in more
detail in the relevant section of the guide TRM Instruments: Processing and Calculations.
To set up an instrument:
1. In Instrument Editor, define the main characteristics of the instrument in the upper part of the
editor.
Information

Description

ID & Name

Unique ID and name for the instrument.

Instrument Type

Instrument type on which the instrument is based. This is a mandatory field.
Commercial loan instruments must be based on an instrument type derived from the
class COMMERCIAL-LOAN.
Exceptions to this are:
•

Funding Call instruments: Instrument Class = CASH

•

Facility Collateral instruments: Instrument Class = COLLATERAL TRANSFER.

Instrument Group

Instrument group to which the instrument belongs (defined in Instrument Group
Editor).

Active From
Active To

Active period (From/To dates inclusive) to restrict the period in which the instrument
can be traded (optional).

Buy Label

Labeling for Buy/Sell transactions (optional) to override the default settings.

Sell Label
Result Type

Result type to use for this instrument (defined in Result Type Editor). This is a
mandatory field.

Domain

Domain in which the instrument is available.

2. In the Features page, add or remove the features you need for this instrument.

Note: Some of the features assigned to an instrument need to be configured further, either in the
instrument setup itself, or in the configuration of action rules. For more information, see

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2 Managing static data
2.6 Transaction templates

Appendix A Features on page 149 and Chapter 5 Managing loan events on page 69.
The values you need to enter to define a particular category of instrument are explained in
the guide TRM Instruments: Processing & Calculations.
3. In the Links page, you can add a link to any file stored on your network (for example, a link to a
document which contains information related to trading a specific instrument) or a hyperlink to
an Internet URL (such as, an issuer’s web site).
4. In the Properties page, you can add miscellaneous pieces of information to the instrument
definition for which there is no specific field or switch in the editor.
The properties you will need are added at implementation according to your organization’s
requirements. When you assign a property to an entity, you also need to assign the
corresponding value. Note that it is possible to create more properties using Property Editor.
5. Save the whole instrument definition using File - Save As New.

2.6 Transaction templates
A loan agreement includes financial clauses which specify the drawdown components, along with
data such as interest periods, interest calculation methods, and principal repayment schedules.
A transaction template captures the component values of a particular instrument in which the loan is
to be disbursed and allows you to add the specific clauses of a loan contract into it or to directly
attach the template to a transaction.
Transaction templates allow all the attributes of a transaction and its schedules (principal, interest,
events, and so on) to be predefined and later used to create drawdowns.
The schedules included in a transaction template are defined by the attached schedule template:
therefore, you need to set up at least one schedule template, see 2.2 Schedule templates on page
19.
A transaction template can then be attached to a facility, or it can remain independent so that it is
available for use with all facilities with the relevant instrument.
Transaction templates are defined in Transaction Template Editor.
To define a transaction template:
1. In Transaction Template Editor, enter the main attributes of the template in the upper part of
the editor.
Information

Description

ID & Name

Unique ID and name for the transaction template.

User

ID of the authorized user (or user group) of the template.

Owner

User ID of the owner of the template.

Instrument Group

Instrument group to which the template belongs.

Instrument

Instrument to which the template is applied.

Facility

Facility for which the template is defined.
Facilities are defined in Facility Editor: see 2.9 Facilities on page 24 for more
information.
Note: If a facility is specified in this field, the transaction template cannot be used for
any other facility.

Schedule
Template

Schedule template you want to apply to the transaction template.

2 Managing static data
2.7 Facility types

Information

Description

Comment

Descriptive text giving further information.

Switches

•

Fixed Schedule - if this switch is on, only schedules defined in the template are
available in the drawdown transaction using this template. This means that no
other schedules can be added at drawdown entry.

2. Save the transaction template definition using File - Save As New.
3. In Transaction Template Editor’s Transaction Column page, specify the default values for each
transaction column you want to define in the template.
Information

Description

Column

Name of the transaction column for which you want to define a value.

Value

Default or fixed value for the specified Column.

Comment

Descriptive text giving further information.

Switches

•

Default - if this switch is on, the corresponding Value is the default for the Column,
but it can be modified at drawdown entry (if Frozen is not set).

•

Frozen - if this switch is on, the specified Value cannot be modified.

•

Mandatory - if this switch is on, the Column must contain a value before the
transaction can be saved at drawdown entry.

4. In Transaction Template Editor’s Schedule Column page, specify the default values for each
schedule column you want to define in the template.
Information

Description

ID & Description

Part of the schedule for which you want to define a value.
The schedules available for selection are determined by the Schedule Template that you
selected in the upper part of the editor.

Column

Name of the schedule column for which you want to define a value.

Value

Default or fixed value for the specified Column.

Comment

Descriptive text giving further information.

Switches

•

Default - if this switch is on, the corresponding Value is the default for the Column,
but it can be modified at drawdown entry (if Frozen is not set).

•

Frozen - if this switch is on, the specified Value cannot be modified.

•

Mandatory - if this switch is on, the Column must contain a value before the
transaction can be saved at drawdown entry.

5. Save the transaction template definition using File - Save.

2.7 Facility types
Facility types can be created as a way of organizing facilities in the system and are assigned to the
facility definitions. For example, a facility created for a standard loan could be divided further into
such types as: Syndicated, Direct, or Global. Facility types are created in Facility Type Editor.

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2 Managing static data
2.8 Facility templates

To define a facility type:
1. In Facility Type Editor, enter the main attributes of the facility type.
Information

Description

ID & Name

Unique ID and name for the facility type.

Domain

Domain in which the facility type is available.

2. Save the facility type definition using File - Save As New.

2.8 Facility templates
You set up Facilities with the aid of a template. In the template, you can define a set of data which
you then use to set up a facility with the same attributes.
A facility template contains all the fields and switches that are available in Facility Editor. In the
template, you can activate or disable the fields and switches and specify which attributes need to be
editable, available, or mandatory in Facility Editor. You can also use the template to restrict the
values displayed in Facility Editor’s selection lists.
When you assign a template in Facility Editor, the template automatically fills in some of the
information, so that you only have to provide a limited set of values when you create the facility
itself.
To define a facility template:
1. In Facility Template Editor, enter an ID and name for the template in the upper part of the
editor.
2. Customize the fields and switches as necessary: the fields and switches are explained in 2.9
Facilities on page 24.
There are three settings which you can apply to fields:

–

Mandatory - you must provide values for mandatory attributes.

–

Editable - you have access to the field and can provide a value. All mandatory fields are
editable by default.

–

Ignore Template List - you will not override a value which was defined before you applied the
template. This means, that if a field is blank in the template, if you apply the template to a
facility for which a value already exists for that field, the existing value is not replaced.

3. Save the facility template using File - Save As New.

2.9 Facilities
When a loan contract has been agreed, the details of the agreement are set up in CLM as a facility.
Facilities store all of the key data from the loan agreement that is needed by the Back Office during
the daily processing of the lending business.
This section describes the steps required to set up a facility.

2 Managing static data
2.9 Facilities

2.9.1 Defining the main attributes
To define a facility:
1. In Facility Editor, enter the main attributes of the facility in the upper part of the editor.
Information

Description

Template

Facility template to be used to set up the facility. (Mandatory.)

ID & Name

Unique ID and name for the facility. The system automatically generates the ID when
you save the definition.

Short Name

Short name for the facility.

Description

Description of the facility.

Type

Facility type to which the facility belongs.

Sign

Sign of the facility: Borrowing or Lending.

Currency

Currency of the facility.

Approval

Approval under which the facility is given: see 2.11 Approvals (optional) on page 41.

Approval Currency

Approval Currency defaults to the currency specified in the approval and cannot be
modified.

FX Rate

FX rate between Approval Currency and the Currency defined for the facility when the
two currencies are different.
This rate is used to determine the loan amounts affecting the approval generated from
this facility.

Portfolio

Portfolio of the facility.

Loan Officer

User ID of the Loan Officer responsible for the facility.

State

State of acceptance of the facility definition: see 2.9.3 Approving facilities on page 36.

Language

Default language of the facility. Messages will be created in this language if no other
language is specified for the recipient in the message configuration.

Reference Facility

ID of another facility if you want to create a link between this facility and another.
For example, this field allows a link to be maintained between a maturing facility and
its replacement, or in the case of a loan conversion, a new contract set up with new
terms and conditions and the original facility.

Original Facility

If you specify a Reference Facility, this field displays the original facility of the reference
facility.
If you do not specify a Reference Facility, this field displays the ID of the current facility
after the record is saved.

Signature Date

Date on which the facility is signed.

Next Review Date

Date on which the facility is next to be reviewed.

Active From Date

Period within which the facility is active.

Active To Date
Domain

Domain in which this facility is available.

Action

Action available to accept or reject the facility definition to move it forward or
backwards in the process flow according to the system configuration: see 2.9.3
Approving facilities on page 36.

Mirror Parent

Switch on to identify this facility as a parent facility.
This switch is only available on new (that is, unsaved) facilities.
Once the parent facility is saved, the mirror child facility is automatically created.
See 2.9.5 Mirroring facilities on page 37.

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2 Managing static data
2.9 Facilities

Information

Description

Mirror Child

(Information only.)
If this switch is on, it identifies the facility as a mirror child.
The mirror child is created automatically when the parent facility definition is saved.
See 2.9.5 Mirroring facilities on page 37.

Save as New

Switch on to create a new facility by copying the existing one. If switched on, any
changes are saved to a new facility and not to the selected facility.

2. Save the facility definition using File - Save As New.
3. Complete the facility definition using the information in 2.9.2 Defining contract details on page
26.
4. Send the facility through the process flow using the information in 2.9.3 Approving facilities on
page 36.

2.9.2 Defining contract details
A facility is composed of several elements that define the details of the contract. These are specified
in the pages in the lower part of Facility Editor.
The contract details that you can specify for the facility are listed in the below table. Further
information about how you define these contract details are found in the subsequent sections.
Contract detail
Credit Amount

Description
Credit amount authorized under the contract.
See 2.9.2.1 Defining credit amount details on page 27.

Drawdown Currency

Details of the acceptable drawdown currencies in the facility.
See 2.9.2.2 Defining drawdown currency details on page 28.

Counterparty

Borrowers/lenders who are participants under the contract and against whom the
exposure limits are calculated.
See 2.9.2.3 Defining counterparty details on page 28.

Payback FX Rates

FX rates used to convert repayment amounts when repayment is made in a different
currency.
See 2.9.2.4 Defining payback FX rate details on page 29.

Location

Locations allowed under the contract.
See 2.9.2.5 Defining location details on page 29.

Owner

Owner of the contract.
See 2.9.2.6 Defining owner details on page 29.

Instrument

Type of loan (for example, Fixed Rate, Floating Rate, Annuity, Guarantee-Backed,
Collateralized, and so on); and type of event (for example, Prepayments, Currency
Conversion, Interest Rate Type Conversion, Drawdown Restructuring, Debt
Suspension, Write-Off, and so on), that are permitted under the contract.
See 2.9.2.7 Defining instrument and event details on page 30.

Funding Types

Various types of funding for the facility.
See 2.9.2.8 Defining funding type details on page 30.

Tranche

A facility can be single- or multi-tranche, and must always contains at least one
tranche. Additional tranches can be created to add restrictions under the facility, or to
add different tranches with separate limits and conditions as in the loan agreement.
See 2.9.2.9 Defining tranche details on page 30.

2 Managing static data
2.9 Facilities

Contract detail

Description

Transaction Templates

Transaction templates that store the financial clause details (by instrument), such as
acceptable interest periods, method of principal repayment, date bases, fixing rates,
and so on.
See 2.9.2.10 Defining transaction template details on page 31.

Beneficiary

Clients against whom the actual settlements would take place, when the counterparty
is not the settlement counterparty.
See 2.9.2.11 Defining beneficiary details (optional) on page 32.

Guarantor

Details of guarantor(s) that are the approved guarantors under the contract.
See 2.9.2.12 Defining guarantor details (optional) on page 32.

Sublimits

Sub-set of the credit amount that can defined by counterparty, instrument, or
currency, or some other relevant attribute of the contract.
See 2.9.2.13 Defining sublimits (optional) on page 32.

Drawdown Conditions

Conditions specified in the contract: for example, the minimum and maximum values
allowed for disbursal amounts, interest rates, or tenor of a loan.
See 2.9.2.14 Defining drawdown condition details (optional) on page 33.

Collateral Agreement

Details of credit lines backed by collateral provided by either the borrower or by
guarantors.
See 2.9.2.15 Defining collateral agreement details (optional) on page 34.

Drawdown Parameters

User-defined parameters and values assigned to the facility.
See 2.9.2.16 Defining drawdown parameter details (optional) on page 34.

Mandate

Details of a mandate if the loan is subsidized.
See 2.9.2.17 Defining mandate details on page 35.

Switches

A series of switches to control the way in which the Facility works.
2.9.2.18 Defining switches details on page 35.

Properties

User defined properties and values assigned to the facility.
2.9.2.19 Defining properties details on page 35.

Links

User defined links to documentation stored in a network directory.
2.9.2.20 Defining links details on page 36.

Ad hoc Message
Clients

These are clients to whom it may be necessary to send messages to, but who have no
role in any Drawdown or Drawdown Action. Such as Parents, Administrators, Lawyers,
etc. See 2.9.2.21 Defining ad hoc message client details on page 36

Contact Rules

These are the rules under which messages will be sent to contacts in Counterparties,
Owners, Ad hoc Message Clients, etc. See 2.9.2.22 Defining contact rule details on
page 36.

2.9.2.1 Defining credit amount details
When a facility is set up, the initial credit amount is stored in the definition. The credit amount is the
total amount authorized under the contract, that is, the maximum amount that can be borrowed
under the facility agreement. It is defined in Facility Editor’s Credit Amount page.
It is also possible to set up sublimits on the amount that can be drawn against individual
components of the facility: see 2.9.2.13 Defining sublimits (optional) on page 32.
Information

Description

Amount

Amount of credit. This field is mandatory and cannot be modified once it is attached to
an active transaction or if the facility to which it is attached has reached Final state.

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2 Managing static data
2.9 Facilities

Information

Description

Effective Date

Date on which the credit amount takes effect.
The effective date of the credit amount must fall on or between the dates defined for
Active From Date and Active To Date (if these dates are specified).

Note: Once the facility has been approved and it has reached the final state, the credit amount of
the facility can no longer be updated using Facility Editor: Amount Event Manager must be
used instead: see Chapter 3 Managing amount events on page 49.

2.9.2.2 Defining drawdown currency details
The details of the acceptable or excluded drawdown currencies in the facility can be defined in
Facility Editor’s Drawdown Currency page.
When the drawdown currency is not the same as the credit currency, the conditions for the FX rate
that is used to convert the amount of the drawdown from the drawdown currency to the credit
currency (and vice versa) can be defined here.
Additionally, specific denomination conditions can be attached to each drawdown currency.
Information

Description

Exclude

(Read-only.) If this switch is off, then currencies selected in this page are included. If
this switch is on, when Include All Currencies is set in the Switches page, then the
selected currencies are excluded.

Drawdown Currency

Currency in which the drawdown is made.

FX Rate Method

FX Rate Method: Fixed or Not Fixed.

FX Rate

FX rate used when FX Rate Method = Fixed.

Fixing Offset

Number of days’ offset allowed, that is, the difference in days between the fixing date
and the payment date when FX Rate Method = Not Fixed.

Scenario

Scenario from which you want to retrieve the FX rates when FX Rate Method = Not
Fixed.

Denomination
Currency

Denomination currency. Choices are: Credit Currency or Drawdown Currency. The loan
agreement may specify that drawdowns must be in the multiples defined in the
Denomination Multiple field, i.e. Credit Currency or Drawdown Currency.

Denomination Multiple

Denomination multiple that cannot be a negative number and cannot be more than
the facility amount.

Comment

Descriptive text giving further information.

2.9.2.3 Defining counterparty details
The contract’s counterparty details are defined in Facility Editor’s Counterparty page. These details
include information about the borrower(s) or lender(s) who are participants under the contract and
against whom the exposure limits are calculated.
Information

Description

Exclude

(Read-only.) If this switch is off, then counterparties selected in this page are
included. If this switch is on, when Include All Counterparties is set in the Switches page,
then the selected counterparties are excluded.

Counterparty

ID and name of the counterparty of the contract.

Counterparty Name

2 Managing static data
2.9 Facilities

Information

Description

Preferred Beneficiary

ID and name of the preferred beneficiary of this counterparty.

Preferred Beneficiary
Name
Comment

Descriptive text giving further information.

2.9.2.4 Defining payback FX rate details
When the borrower makes a repayment in a currency that is different to the drawdown currency,
you need to define which FX rates are used to allocate the cashflows against the payments for the
facility. This is done in Facility Editor’s Payback FX Rates page.
Information

Description

Exclude

Switch on to exclude this currency.

Settlement Currency

Currency in which settlement is made.

FX Rate Method

FX Rate Method: Fixed or Not Fixed.

FX Rate

FX rate used when FX Rate Method = Fixed.

Fixing Offset

Number of days’ offset allowed, that is, the difference in days between the fixing date
and the payment date when FX Rate Method = Not Fixed.

Scenario
Subscenario

Scenario and subscenario from which you want to retrieve the FX rates when FX Rate
Method = Not Fixed.

Comment

Descriptive text giving further information.

2.9.2.5 Defining location details
In the Location page, you can define the acceptable locations in the facility.
Field

Enter or select

Exclude

(Read-only.) If this switch is off, then locations selected in this page are included. If
this switch is on, when Include All Locations is set in the Switches page, then the
selected locations are excluded.

Location

Select the location you want from the list of available locations.
Note: Locations are defined in Country Editor.

Comment

Descriptive text giving further information.

2.9.2.6 Defining owner details
The owner of the facility is defined in the Owner page.
Information

Description

Exclude

(Read-only.) If this switch is off, then owners selected in this page are included. If this
switch is on, when Include All Owners is set in the Switches page, then the selected
owners are excluded.

Owner

ID and name of the portfolio owner of the facility.

Owner Name
Comment

Descriptive text giving further information.

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2.9.2.7 Defining instrument and event details
In Facility Editor’s Instrument page, you can define the types of loan and types of event that are
permitted under the contract.
Information

Description

Exclude

(Read-only.) If this switch is off, then instruments selected in this page are included. If
this switch is on, when Include All Instruments is set in the Switches page, then the
selected instruments are excluded.

Event Type

Type of event. For example, Commitment Fee, Drawdown, Drawdown Collateral,
Drawdown Fee, Equity, Facility Collateral, Facility Fee, Guarantee Call, Guarantee
Refund, Late Payment Penalty, and so on, permitted under the contract. Event types
are defined in the Action Rule Type Editor, see 5.1.1 Action rule types on page 70.
Note: When the field refers to an entity that is created in another editor, you can
right-click the field to launch the editor.

Instrument Class

(Information only.) The system populates the instrument class according to the
selected event type.

Top Instrument Group

Instrument group and instrument allowed under the contract.

Instrument Group

Note: When setting up the instruments, you must respect the order of these fields.
Available options in each of these fields are determined by the selected value in
the preceding field. For example, Top Instrument Group is linked to the Event Type;
Instrument Group is linked to the Top Instrument Group and so on.

Instrument

Preferred Transaction
Template

Preferred transaction template for the instrument or event. This will be the default
template when entering a new drawdown in Drawdown Manager. The list of available
templates is automatically updated according to the selected instrument.

Fixed Transaction
Template

Switch on to fix the template so it cannot be changed at drawdown.

Facility Templates
Only

Switch on to limit the choice of transaction templates to those selected for this facility.

Credit Linked

Switch on so that a drawdown entered using this instrument affects the credit
utilization.
Note: This switch is automatically set if you have switched on the Credit Linked Default
switch in the Action Rule Type Editor. See 5.1.1 Action rule types on page 70.

Comment

Descriptive text giving further information.

2.9.2.8 Defining funding type details
The various types of funding available under the contract must be defined in the Funding Types page.
Information

Description

Exclude

(Read-only.) If this switch is off, then funding types selected in this page are included.
If this switch is on, when Include All Funding Types is set in the Switches page, then the
selected funding types are excluded.

Funding Type

Type of funding: for example, Own Funds. Funding types are defined in the Funding
Type Editor, see 2.12 Funding types (optional) on page 42.

Comment

Descriptive text giving further information.

2.9.2.9 Defining tranche details
At least one tranche must be set up for each facility. A tranche cannot exist without a parent facility.
Before you can set up the tranche details, you need to define the main attributes of the tranche in
Facility Editor’s Tranche page.

2 Managing static data
2.9 Facilities

Once the facility definition has been saved, you can enter the remaining details of the tranche in
Tranche Editor: see 2.10 Tranches on page 39.
Information

Description

Facility ID

(Information only.)

Facility Description

Facility ID and description defined in the upper part of the editor.

(Information only.)
Unique numeric ID of the tranche. This number is automatically assigned by the
system.
Note: When the field refers to an entity that is created in another editor, you can
right-click the field to launch the editor.

Name

Name of the new tranche.

Description

Descriptive text giving further information.

Revolving

Switch on if the tranche is of a revolving nature.

Committed

Switch on if the tranche amount is committed.

Repaid When
Allocated

Switch on if repayments under the tranche are only to affect the figures in Limit
Monitor once they have been allocated in Payment Allocation Manager.

Revolving End Date

Enter the revolving end date when the Revolving switch is on and when the revolving
end date you want to enter is before the Active To Date of the Facility or when there is
no Active To Date.

Tranche Calendar

Calendar to be used for the tranche.

Drawdown Period
Start

Period during which the tranche is active.

Drawdown Period End
Last Repayment Date

Last date allowed for repayment.

Offer Expiry Date

Date on which the offer expires.

Own Owners

Each switch corresponds to a parameter (page, field, or switch) in Tranche Editor.

Own Counterparties

Switch on one or more of these switches to activate the corresponding page in
Tranche Editor if you are defining multiple tranches.

Own Beneficiaries
Own Credit Amounts
and so on.

If you are defining a single tranche under this facility, do not activate any of the
switches.
•

If a switch is on, you define the details in the corresponding page of Tranche
Editor.

•

If a switch is off, the attributes defined in the facility are applied to the tranche and
the corresponding page in Tranche Editor is not available.

2.9.2.10 Defining transaction template details
The loan agreement contains clauses specifying drawdown components: for example, the interest
periods, methods used to calculate interest, and the repayment schedule of the principal amounts.
This predefined data is stored in transaction templates as financial clauses. Transaction templates
allow all the attributes of a transaction and its schedules to be captured and later used in creating
drawdowns.
In Facility Editor’s Transaction Templates page, you can define the templates for each instrument in the
facility.
Information

Description

Exclude

(Read-only.) If this switch is off, then transaction templates selected in this page are
included. If this switch is on, when Include All Transaction Templates is set in the Switches
page, then the selected transaction templates are excluded.

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Information

Description

Preferred Transaction
Template

This switch is set automatically when the Transaction Template has been added as the
Preferred Transaction Template for an Instrument in the Instrument page, see 2.9.2.7
Defining instrument and event details on page 30.

Instrument

Instrument used with the transaction template defined in the Transaction Template field.

Transaction Template

Transaction template for the instrument specified in the Instrument field.

Comment

Descriptive text giving further information.

2.9.2.11 Defining beneficiary details (optional)
Beneficiaries are the clients against whom the actual settlements would take place when the
counterparty is not the settlement counterparty.
One counterparty can have more than one beneficiary. Beneficiary details are defined in Facility
Editor’s Beneficiary page.
Information

Description

Exclude

(Read-only.) If this switch is off, then beneficiaries selected in this page are included.
If this switch is on, when Include All Beneficiaries is set in the Switches page, then the
selected beneficiaries are excluded.

Preferred Beneficiary

This switch is set automatically when the beneficiary has been added as the Preferred
Beneficiary for a counterparty in the Counterparty page, see 2.9.2.3 Defining
counterparty details on page 28

Counterparty

ID and name of the counterparty.

Counterparty Name
Beneficiary

ID and name of the beneficiary.

Beneficiary Name
Comment

Descriptive text giving further information.

2.9.2.12 Defining guarantor details (optional)
In Facility Editor’s Guarantor page, you define the details of guarantor(s) that are the approved
guarantors under the contract.
Information

Description

Exclude

(Read-only.) If this switch is off, then guarantors selected in this page are included. If
this switch is on, when Include All Guarantors is set in the Switches page, then the
selected guarantors are excluded.

Counterparty

ID and name of the counterparty.

Counterparty Name
Guarantor
Guarantor Name

ID and name of the guarantor. There can be more than one guarantor per
counterparty.

Comment

Descriptive text giving further information.

2.9.2.13 Defining sublimits (optional)
Facility sublimits are restrictions on the amount that can be drawn against individual components of
the facility.
For example, a facility may have multiple borrowers, but a specified borrower is allowed to borrow
only a small part of the facility’s overall credit limit.

2 Managing static data
2.9 Facilities

In this case, a sublimit can be set up within the facility definition. A sublimit is set up for a
combination of up to three static data components within the facility. These sublimits are verified
and the credit utilization is updated when a drawdown is entered against the facility agreement.
Use the Sublimits page to apply a sublimit to a single static data component (for example,
counterparty, instrument, or currency), or a combination of two or three static data entities.

Note: Each static data entity defined in the sublimit must already be set up in the facility.
Information

Description

Sublimit ID

(Information only)
Unique numeric ID of the sublimit. This number is automatically assigned by CLM.

Sublimit Name

Name for the sublimit.

Active From Date

Date range within which this sublimit is active.

Active To Date

These dates must fall on or between the dates defined for the Active From Date and
Active To Date of the facility.

Comment

Descriptive text giving further information.

Pre-Conditions Key
(1, 2, 3)

Pre-condition (for example, Counterparty, Currency, and so on) and a value for the
pre-condition.

Pre-Conditions Value
(1, 2, 3)

You cannot select the same key more than once under the same sublimit.

Sublimit Expression

Sublimit expression for condition setting. Choose from: % of Credit Amount,
Maximum Credit Amount, Number of Drawdowns, Number of Drawdown Currencies.

Maximum Value

Maximum value for the selected sublimit expression.

2.9.2.14 Defining drawdown condition details (optional)
Some conditions of a drawdown defined in the loan agreement can be stored in Facility Editor’s
Drawdown Conditions page. These conditions control some of the content of individual drawdowns
under this facility and are checked during the processing of the drawdown.
The conditions that can be set up in this page include: dates, rates, and amounts.
A drawdown condition can be set up to be either inflexible or flexible: an inflexible condition
prevents a drawdown from being processed further; a flexible condition generates a warning
message that can be overridden to allow the drawdown to continue in the process flow.
Information

Description

Disallow

Switch on to disable the drawdown conditions fields. Drawdowns entered meeting
these conditions will be disallowed.
If this switch is on, only pre-conditions can be defined.

Condition

(Information only.)
Unique numeric ID of an amount entry in the facility. This number is automatically
assigned by CLM.

Condition Name

Enter a name that clearly identifies the drawdown condition.

Validation Method

Validation to be performed on this condition. A validation method is a combination of
state and action type. Concretely, this defines at which point in the drawdown entry
process the drawdown condition is checked.

Block Transactions

Switch on to prevent the drawdown transaction from being saved if the conditions are
not met, in which case an error message is displayed. Otherwise, a warning message
is displayed.

Comment

Descriptive text giving further information.

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Information

Description

Pre-Conditions Key
(1, 2, 3)

Pre-condition (for example, Counterparty, Currency, and so on) and a value for the
pre-condition.

Pre-Conditions Value
(1, 2, 3)

You cannot select the same key more than once under the same condition.

Drawdown Attribute

Drawdown attributes that can be used for condition setting.
For example, choose from: Schedule Rate, Opening Date, Drawdown Maturity Date,
Credit Amount, and so on.

Reference Attribute

Attribute for more specific condition setting that refers to the attribute selected in the

Drawdown Attribute field.

For example, if Drawdown Attribute = Schedule Rate, choose from: Drawdown
Aggregated Rate or Schedule Base Rate.
Schedule Type
Ref. Schedule Type

If Drawdown Attribute = Schedule Rate, select a schedule type and, if required, a
different reference schedule type, for the condition.

Minimum Value

Minimum and maximum value for the selected attribute.

Maximum Value

These fields are available only when the Drawdown Attribute field contains a value.

Minimum Deviation

Minimum and maximum value against which deviation is calculated.

Maximum Deviation

These fields are available only when both the Drawdown Attribute and Reference Attribute
fields contain a value.

Note: If you need to change an inflexible condition in an existing facility definition to a flexible

one, then the facility must be amended and sent back through the process flow in order to
be re-authorized: see 2.9.4 Modifying facilities on page 37.

2.9.2.15 Defining collateral agreement details (optional)
Facilities can be set up for credit lines backed by collateral provided by either the borrower or by
guarantors. A drawdown under a facility can only be secured using one of the collateral agreements
defined as eligible under the contract.
Collateral can only be accepted when it is defined under a collateral agreement (as defined in
Collateral Agreement Editor).
Information

Description

Exclude

Switch on to exclude this collateral agreement.

Collateral Agreement

ID of the collateral agreement eligible under this contract.

Owner

Portfolio owner: only the portfolio owners defined under the facility are available for
selection: see 2.9.2.6 Defining owner details on page 29.

Collateral
Counterparty

(Information only)
Counterparty for the collateral agreement.

2.9.2.16 Defining drawdown parameter details (optional)
Drawdown parameters can be defined for a facility in Facility Editor’s Drawdown Parameters page as a
way to configure user-specific data.
You use parameters to meet any extra specification needs your organization may have: each
parameter can contain a set of your own custom values. You can use these parameters in rule
definitions for selecting transactions, or as grouping criteria in reports and monitors. Parameters are
set up in Parameter Editor.

2 Managing static data
2.9 Facilities

2.9.2.17 Defining mandate details
Mandates are used when a loan is subsidized. Details of the mandate for the facility are defined in
Facility Editor’s Mandate page.
Information

Description

Exclude

(Read-only.) If this switch is off, then mandates selected in this page are included. If
this switch is on, when Include All Mandates is set in the Switches page, then the selected
mandates are excluded.

Mandate

Mandate for this facility.
Mandates are defined in Mandate Editor: see 2.13 Mandates (optional) on page 43.

Mandate Name

(Information only)

Subsidy Currency

Details of the mandate taken from the definition of the selected mandate.

Default Subsidy Rate
Default Subsidy
AddOn %
Comment

Descriptive text giving further information.

2.9.2.18 Defining switches details
Switches are used to enable certain functionality within the facility.
Information

Description

Fixed Guarantees

Switch on to ensure that details of the guarantee cannot be changed during entry.

Facility Guarantees Only

Switch on to ensure that only guarantees that have specifically been set up for
this facility can be used. See 2.9.2.12 Defining guarantor details (optional) on
page 32.

Validate Against Mandate

Switch on so that only the instrument and funding types defined under a mandate
are valid in this facility. See 2.13 Mandates (optional) on page 43.

Allow Commitment Fee
Rollover

Switch on to allow rollover of commitment fees.

Technical Delay from
Location

Switch on to use the Technical Delay from the Country Group setup corresponding
to Location

Include All
Include All
Include All
Include All
Include All
Include All
Include All
Templates
Include All
Include All
Include All

Switch on for each entity to allow all values under the Facility. If the switch is on,
the related page is only used to exclude values.

Currencies
Locations
Owners
Counterparties
Mandates
Instruments
Transaction

For example, you can include all counterparties except 'COUNTERPARTY-A' by
selecting Include All Counterparties in this page and then selecting
COUNTERPARTY-A' in the Counterparty page. (You will notice in the Counterparty
page that the Exclude switch is on and cannot be modified.)

Beneficiaries
Guarantors
Funding Types

2.9.2.19 Defining properties details
Properties can be defined for a facility in Facility Editor's Properties page as a way to configure
user-specific data.
You use properties to meet any extra specification needs your organization may have: each property
can contain a set of your own custom values. You can use these properties in reports. Properties are
set up in Property Editor.

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2.9.2.20 Defining links details
Links are used to provide direct links from the Facility to network directories holding facility related
documentation such as Loan Agreements, Signatory Lists, etc.
Information

Description

Name

Name of the document.

Address

Path to the network directory and file.

Comment

Optionally, add any additional comments.

2.9.2.21 Defining ad hoc message client details
Ad hoc Message Clients allows you to add additional clients to the facility who may also receive
messages when any processing takes place i.e. for Drawdown Confirmations, Rate Fixings, Payment
Reminders, etc.
Information

Description

Client

Select from the full list of clients available in the system.

2.9.2.22 Defining contact rule details
Contact Rules can be defined at the tranche or facility level to determine when particular messages
should be sent to contacts at the recipients (Counterparties, Owners, Ad hoc Clients).
Information

Description

Client

Name of the client for which the rule applies.

Contact Name

Name of the contact for which the rule applies.

Priority

Used to determine the matching contact rule. If more than one matching contact
rule is found with the same priority, then the relevant message will be sent to all
of those contacts.

Message Group

Message Group for which the rule applies.

Message Type

Message Type for which the rule applies.

Message Subtype

Message Subtype for which the rule applies.

Rule

The rule used in matching.

Not Rule

The not rule used in matching.

Preferred Language

The Preferred Language of the contact The preferred language for CLM Messages
is selected according to the following priority:

Preferred Medium

•

From the Message Rule

•

From the Contact Rule on Tranche/Facility/Client

•

From the Facility Header

•

Defaults to en_US.

The Preferred Medium of the contact.

2.9.3 Approving facilities
When a new facility agreement is defined and saved in Facility Editor, the system automatically sets
the facility’s initial state according to a value configured by the System Administrator in the
application’s setup. In most cases, a facility flow consisting of two or more states is configured. If a
facility process flow has not been defined, then there will only be one facility state.

2 Managing static data
2.9 Facilities

When a process flow has been configured, Facility Editor can be used to accept the facility definition
to move it forward to the next stage of the flow by a user that has the required permissions.
User permissions set up in the portfolio of the facility are used to validate whether a specific user
has the necessary permission to accept (or reject) a facility in its current state.

Note: See the TRM System Administration Guide for more information about configuring the
facility process flow.

To accept (or reject) an existing facility definition:
1. In Facility Editor, select the facility definition you want to approve from the list on the left side of
the editor.
The current state of the facility (for example, Provisional) is displayed in the State field in the
upper part of the editor.
2. Verify the parameters of the facility definition.
3. In the Action field, in the upper part of the editor, select one of the following:

–

Accept - to approve the definition and move the facility forward in the process flow

–

Reject - to reject the definition and move the facility backwards in the process flow.

When saving, the facility progresses to the next (or previous) state in the process flow: the
value displayed in the State field is updated according to the system’s process flow configuration.
When the facility reaches the final state (for example, Signed), the Accept value in the Action
field is automatically de-activated.

Note: It is possible to process some other static data entities used in CLM (for example, approval
and mandate definitions) in the same way.

2.9.4 Modifying facilities
Once a facility definition has been set up, fully validated and approved, and has reached the final
state, it is still possible to modify the facility’s attributes, as follows:

•

To modify any of the facility’s values (apart from the credit amount), the facility must go through
the same approval process described in 2.9.3 Approving facilities on page 36.

•

If the amount of available credit under the facility needs to be modified (either increased,
decreased, or transferred), a credit amendment must be done in Amount Event Manager.
See Chapter 3 Managing amount events on page 49 for more information.

2.9.5 Mirroring facilities
CLM enables you to mirror facilities by generating a "child" facility automatically when a "parent"
facility is defined correctly and saved in the system.
When you enter a drawdown under a parent or child facility in Drawdown Manager, the
corresponding reversed drawdown is created automatically under the mirror child or parent facility.

Note: Drawdown mirroring works in a similar way to internal deal mirroring in TRM: see 4.3
Drawdown mirroring on page 67 for more information.

2.9.5.1 Setting up facility mirroring
This section describes the additional values or specific configuration needed for facilities used in
facility mirroring.
A facility must be set up in a certain way and adhere to certain conditions for it to be eligible for use
as a mirror parent.

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If the parent is set up correctly, the mirror child facility is created automatically when the parent
facility definition is saved.

Note: For information about the values or configuration needed for deal mirroring in general in
TRM (for example, portfolios, clients, permissions, and so on), see the TRM User Guide.

To set up a facility as a mirror parent:
1. In Facility Editor, set up a facility using the following information.
Information

Description

Approval

These fields in the upper part of the editor must not contain values: see 2.9.1 Defining
the main attributes on page 25.

Approval
Currency
Owner

Only one portfolio owner can be added in Facility Editor’s Owners page: see 2.9.2.6
Defining owner details on page 29.

Counterparty

Only one counterparty can be added in Facility Editor’s Counterparty page: see 2.9.2.3
Defining counterparty details on page 28.

Location

If you define a location, only one location can be added in Facility Editor’s Location
page: see 2.9.2.5 Defining location details on page 29.

Tranche

Only one tranche can be added in Facility Editor’s Tranche page: see 2.9.2.9 Defining
tranche details on page 30

Transaction
Template

Transaction templates must not be facility-specific: it must be possible to apply the
template to both the mirror parent and the mirror child facility: see 2.9.2.10 Defining
transaction template details on page 31.

The following pages in Facility Editor must not contain values:

–

Beneficiary

–

Payback FX Rates

–

Guarantor

–

Funding Types

–

Collateral Agreement

–

Mandate

Note that the same conditions must also be met on the related tranche.
See 2.9 Facilities on page 24 for information about setting up facilities in general.
2. Switch on Mirror Parent in the upper part of the editor when you have finished defining the facility.
Note that this switch is only available on new (that is, unsaved) facilities.
3. Save the facility definition using File – Save As New.
The mirror child facility is generated automatically, with the following attributes:

–

Facility ID = generated automatically by the system

–

Name = Name of the mirror parent prefixed by "M-"

–

Property = MIRROR-ID and Value = Facility ID of the mirror parent is set on Facility Editor’s
Property page (the same property is set on the parent facility but with Value = Facility ID of
the mirror child)

–

Sign = Lending (if Sign = Borrowing for the mirror parent and vice versa)

–

Counterparty of the mirror child = Owner of the mirror parent

–

Owner of the mirror child = Counterparty of the mirror parent

–

Mirror Child switch is activated.

2 Managing static data
2.10 Tranches

4. Complete the mirror child facility definition. The following fields can be defined independently
from the parent facility:

–

Name

–

Portfolio

–

Short Name

–

Loan Officer

–

Description

–

Domain

–

FX Rate

–

Location

5. Send the mirror facilities through the process flow using the information in 2.9.5.2 Approving
mirror facilities on page 39.

2.9.5.2 Approving mirror facilities
When a parent facility is defined and the mirror child is generated, the system automatically sets the
initial state of both facilities as with a normal facility definition (see 2.9.3 Approving facilities on
page 36).
You must execute the Accept (or Reject) actions on the parent facility in order to move both facilities
to the next stage of the facility process flow: the actions carried out on the parent are mirrored on
the child facility.

2.9.5.3 Modifying mirror facilities
Once the mirror facilities have been set up, fully validated and approved, and have reached the final
state, it is still possible to modify them, as follows:

•

To modify the mirror facilities’ values (apart from the credit amount), the parent facility must be
reopened, modified, and resent through the approval process back to the final state (that is,
Signed). The change is mirrored to the child facility.

•

If the amount of available credit under the mirror facilities needs to be either increased or
decreased, the credit amendment must be done in Amount Event Manager on the parent facility.
The credit amendment is mirrored to the child facility.
See Chapter 3 Managing amount events on page 49 for more information.

2.10 Tranches
Tranches are used to manage the boundary conditions that are a part of the loan agreement or loan
covenants that define the constraining factors linked to the loan.
A tranche cannot exist in isolation and can be created only after a facility (the loan agreement) has
been set up. A tranche is an important link between a facility and the drawdown under the facility. It
is not possible to make a drawdown directly under the facility: drawdowns can only be made against
a tranche.
A tranche is set up based on the definition of the facility and every facility must have at least one
tranche. Each tranche can have a specific set of conditions for lending, but all the conditions of the
tranche must comply with the overall facility conditions: a tranche is at least as restrictive as its
facility.
For example, the credit amount of a single tranche cannot exceed the overall credit amount of the
facility, the tranche’s expiry date cannot be later than the expiry date of the facility, and the
currencies permitted in the tranche cannot be outside the range of currencies permitted within the
facility.
However, when multiple tranches exist for a facility, the aggregated tranche conditions may exceed
the overall facility conditions.

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For example, the overall aggregate credit amount allocated to multiple tranches is allowed to exceed
the total facility credit amount, as long as the actual drawdown amount under multiple tranches
does not exceed the facility’s credit limit.
The main attributes of a tranche are defined in Facility Editor. Only the attributes of the tranche that
differ from the overall conditions defined in the facility are set up in Tranche Editor.
Therefore, if all drawdowns are managed within the same set of conditions, only one single tranche
is required: it is not necessary to define differences between the tranche attributes and the overall
facility attributes.

2.10.1 Defining the main attributes
The main attributes of a tranche are defined under the facility in Facility Editor. Once a tranche has
been defined and saved in the facility, you can view it in Tranche Editor. Further attributes relating
to the tranche, such as any conditions that differ from the facility, as well as drawdown conditions
and sublimits, can be defined for a tranche in Tranche Editor.
The following sections describe the procedure for setting up tranches under a facility.

2.10.1.1 Single tranches
To define the main attributes of a single tranche in a facility:
1. Enter the main attributes of the tranche in Facility Editor’s Tranche page: see 2.9.2.9 Defining
tranche details on page 30.
2. Do not activate any of the Own switches.
When a single tranche is used, the conditions of the tranche are the same as the conditions
defined for the facility.
3. Click Add to add the tranche to the facility.
4. Save the facility definition using File - Save.
The system automatically assigns an ID to the tranche.

2.10.1.2 Multiple tranches
To define the main attributes of multiple tranches in a facility:
1. Enter the main attributes of the first tranche in Facility Editor’s Tranche page: see 2.9.2.9
Defining tranche details on page 30.
2. Activate one or more of the Own switches which correspond to the conditions of the tranche that
differ from those of the facility.

–

If a switch is on, the corresponding page in Tranche Editor is activated.

3. Click Add to add the tranche to the facility.
4. Save the facility definition using File - Save.
The system automatically assigns an ID to the tranche.
5. Repeat the procedure to add further tranches to the facility.
6. Complete each tranche definition in Tranche Editor using the information in the following
sections.

2.10.2 Defining the tranche values
If you are setting up multiple tranches under a facility, when you activate one of the Own switches in
Facility Editor’s Tranche page, the corresponding page in Tranche Editor becomes available to enable
you to specify these values for the tranche.

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2.11 Approvals (optional)

To complete the definition of a tranche:
1. In Tranche Editor, define the values for the tranche in each page you have activated using the
Own switches: the available options in each page are restricted to those values permitted under
the facility.
Note that the only exception to this involves the selection of transaction templates in the
Transaction Templates page: if the Facility Templates Only switch in Facility Editor’s Instrument page is
off, you are able to select transaction templates in the tranche that are not defined under the
facility.
2. Complete the tranche definition in Tranche Editor’s Drawdown Conditions and Sublimits pages.
This is an optional step: the values defined in these pages are independent of the facility
attributes.
3. Save the tranche definition using File - Save.

Note: The information you can enter in Tranche Editor’s pages is the same as the information

required to define a facility’s contract details: see 2.9.2 Defining contract details on page
26.

2.11 Approvals (optional)
In CLM, the initial step in the lending process can be managed using an approval entity.
Typically, an approval is used by the Loan Officer to record the decision of the Credit Committee on
how much can be lent to a borrower or group of borrowers.
In the approval, it is possible to record the following details:

•

Total value of the facility or facilities that can be offered under the approval

•

Loan Officer or other official who was involved in the approval process.

An approval needs to be in place before a facility is signed.
Approvals are defined in Approval Editor.
To define an approval:
1. In Approval Editor, enter the main attributes of the approval in the upper part of the editor.
Information

Details

Unique numeric ID of the approval. This number is automatically assigned by CLM
when you enter a new approval.

Name

Name of the approval.

Description

Descriptive text giving further information.

Portfolio

Loan portfolio of the approval.

Loan Officer

User ID of the Loan Officer responsible for the approval.

Approval Date

Date of the approval. This cannot be later than the Active To Date.

Approved By

ID of the user that has approved the approval.

Active From Date

Period that the approval is active.

Active To Date
Domain

Domain in which this approval is available.

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Information

Details

State

State of acceptance of the approval definition and the actions available to accept or
reject the approval definition to move it forward or backwards in the process flow
according to the system configuration.

Action

Approval entities can be managed using a process flow in the same way as a facility
definition: see 2.9.3 Approving facilities on page 36.

2. In Approval Editor’s Credit Amount page, specify the credit data that applies to this approval.
In this page, you define the initial maximum credit amount of the approval. When facilities are
set up under the approval, they reduce the available approval Amount from the Active From Date of
the Credit Amount of the facility.
Information

Description

Amount

Credit amount specified in the Approval Currency.This field is mandatory and cannot be
modified once it is attached to an active transaction or if the facility to which it is
attached has reached Final state.

Effective Date

Date on which the amount takes effect.
The effective date of the credit amount must fall on or between the dates defined for
Active From Date and Active To Date (if these dates are specified).

3. Repeat the above procedure for any other credit data you want to define for the approval.
4. Save the approval definition using File - Save As New.

Note: If the amount of available credit under the approval needs to be modified (either

increased, decreased, or transferred), the amendment must be done in Amount Event
Manager: see Chapter 3 Managing amount events on page 49 for more information.

2.12 Funding types (optional)
Funding types are used to identify the source of the funds being disbursed under a facility, such as,
Own funds, Group funds, or Third Party funds.
To define a funding type:
1. In Funding Type Editor, enter the main attributes of the funding type in the upper part of the
editor.
Information

Description

ID & Name

Unique ID and name of the funding type.

Instrument Class

(Information only)
By default, Instrument Class = CASH.

Top Instrument
Group

Instrument group used for the funding type.

Instrument Group
Funding Call
Instrument

ID of the instrument set up as a Funding Call instrument. This would normally be used
with third party funds where a funding call is required before finalizing the drawdown.

2. Save the funding type definition using File - Save As New.

2 Managing static data
2.13 Mandates (optional)

3. In Funding Type Editor’s Donor page, select and add the ID of the donor client for this funding
type.
Only client entities that have been defined with the role Donor in Client Editor are available for
selection in this field.
4. In Funding Type Editor’s Currency page, select and add the currency for this funding type.
5. Save the funding type definition using File - Save.

2.13 Mandates (optional)
Mandates are used only by organizations that require mandates in the setup of their loan
agreements.
A mandate can be defined as a source of funds used to subsidize a loan. The funds are made
available to the lending organization by a donor or guarantor and are to be distributed among
borrowers that meet the terms and conditions set out in the mandate.
The terms set out in a mandate can either be very specific (where the donor or guarantor explicitly
mentions the type of project or borrower that can benefit from the subsidy); or the terms of the
mandate may be more general (where the funds can be disbursed at the discretion of the lending
organization).
A mandate contains the following information:

•

Total authorized amount and used amount of the subsidy

•

Amount of subsidy still available

•

Details of the donor.

Each mandate is linked to a facility: see 2.9.2.17 Defining mandate details on page 35.
The following sections describe the procedure for setting up mandates.

2.13.1 Defining the main attributes
To define the main attributes of a mandate:
1. In Mandate Editor, enter the main attributes of the mandate in the upper part of the editor.
Information

Description

ID & Name

Unique ID and name for the mandate.

Description

Descriptive text giving further information.

Portfolio

Loan portfolio of the mandate.

Loan Officer

User ID of the Loan Officer responsible for the mandate.

Subsidy Currency

Currency to be used in setting the overall subsidy amount for the mandate.
This currency is used in all subsidy calls under the mandate.

Subsidy Call
Instrument

Instrument from which subsidy call transactions are created from drawdowns under
this mandate.

Default Subsidy
Rate

(Information only.) Subsidy rate to be defaulted to all drawdowns made under the
mandate.

Default Subsidy
Add On %

Add-on percentage used by default in facility subsidy estimations run under this
mandate.
This add-on can be manually modified in the Subsidy Estimation amount event: see
3.2.1 New subsidy estimation on page 50.

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Information

Description

Subsidy Call Delay

Number of days used as the subsidy call delay.

Signature Date

Date when the mandate is signed.

Active From Date

Period during which the mandate is active.

Active To Date
Domain

Domain in which the mandate is available.

Mandate Estimate

Switch on to define that a mandate level estimation is required before facility level
estimations can be made under the mandate.

State
Action

•

If this switch is on, facility estimations made within an approved mandate
estimation do not need to be approved by the donor separately.

•

If this switch is off, facility estimations can be made as soon as a mandate with a
subsidy amount has been set up: each of them must be separately approved by
the donor.

State of acceptance of the mandate definition and the actions available to accept or
reject the mandate definition to move it forward or backwards in the process flow
according to the system configuration.
Mandate entities can be managed using a process flow in the same way as a facility
definition: see 2.9.3 Approving facilities on page 36.

2. Save the mandate definition using File - Save As New.
3. Complete the mandate definition using the information in the following sections.

Note: If the amount of available credit under the mandate needs to be modified (either

increased, decreased, or transferred), the amendment must be done in Amount Event
Manager: see Chapter 3 Managing amount events on page 49 for more information.

2.13.2 Defining mandate participant details
To define the participant details of a mandate:
1. In Mandate Editor’s Mandate Owners page, add the client or clients you want to define as the
participant.
Information

Description

Participant

Client ID of the owner participant in the mandate.
Typically, this would be the lending organization that is distributing the subsidy on
behalf of the donor or guarantor.

Comment

Descriptive text giving further information.

2. In Mandate Editor’s Mandate Donors page, specify the values for the participants defined with the
role Donor.

Information

Description

Participant

Client ID of the donor participant in the mandate.

Donor Settlement
Client

Settlement client used in subsidy call transactions based on this mandate.

Participation %

Percentage of the total subsidy amount of the mandate accounted for by the
participant when there is more than one donor.

When a Subsidy Call transaction is entered against a donor (counterparty of the
transaction) where a Donor Settlement Client has been given, this is propagated into the
Counterparty Beneficiary field in the Subsidy Call and settlement instructions are
generated accordingly.

2 Managing static data
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Information

Description

Comment

Descriptive text giving further information.

3. In Mandate Editor’s Mandate Guarantors page, specify the values for the participants defined with
the role Guarantor.
Information

Description

Participant

Client ID of the guarantor participant in the mandate.

Participation %

Percentage of the total subsidy amount of the mandate accounted for by the
participant when there is more than one guarantor.

Comment

Descriptive text giving further information.

4. Save the mandate definition using File - Save.
5. Complete the mandate definition using the information in the following sections.

2.13.3 Defining mandate funding details
To define the funding types for the mandate:
1. In Mandate Editor’s Funding Types page, add the type of funding used for lending under the
mandate.
Funding types are defined in Funding Type Editor: see 2.12 Funding types (optional) on page 42.
2. In Mandate Editor’s Instrument Groups page, define the available events under the mandate.
Information

Description

Event Type

Select the event type: for example, Drawdown.
Event types are defined in Action Rule Editor: see Chapter 5 Managing loan events on
page 69.

Instrument Class

(Information only)
Instrument class of the specified Event Type.

Top Instrument
Group

Instrument group of the event type.

Instrument Group
Comment

Descriptive text giving further information.

3. In Mandate Editor’s Subsidy Amount page, enter the maximum subsidy amount of the mandate.
Information

Description

Amount

Subsidy amount denominated in the mandate’s Subsidy Currency. This field is
mandatory and cannot be modified once it is attached to an active transaction or if the
facility to which it is attached has reached Final state.

Effective Date

Date on which the amount takes effect.

4. In Mandate Editor’s Drawdown Conditions page, specify any conditions associated with the
mandate.
Information

Description

Disallow

Switch on to disable the drawdown conditions fields.
If this switch is on, only pre-conditions can be defined.

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Information

Description

Condition ID

(Information only)
Unique numeric ID of an amount entry in the mandate. This number is automatically
assigned by CLM.

Validation Method

Validation to be performed on this condition. A validation method is a combination of
state and action type.

Block Transactions

Switch on to prevent the drawdown transaction from being saved if the conditions are
not met.

Comment

Descriptive text giving further information.

Pre-Conditions
Key (1, 2, 3)

Pre-condition (for example, Counterparty, Currency, and so on) and a value for the
pre-condition.

Pre-Conditions
Value (1, 2, 3)

You cannot select the same key more than once under the same condition.

Drawdown
Attribute

Drawdown attributes that can be used for condition setting.

Reference
Attribute

For example, choose from: Schedule Rate, Opening Date, Drawdown Maturity Date,
Credit Amount, and so on.
Attribute for more specific condition setting that refers to the attribute selected in the

Drawdown Attribute field.

For example, if Drawdown Attribute = Schedule Rate, choose from: Drawdown
Aggregated Rate or Schedule Base Rate.
Schedule Type
Ref. Schedule
Type

If Drawdown Attribute = Schedule Rate, select a schedule type and, if required, a
different reference schedule type, for the condition.

Minimum Value

Minimum and maximum value for the selected attribute.

Maximum Value

These fields are available only when the Drawdown Attribute field contains a value.

Minimum
Deviation

Minimum and maximum value against which deviation is calculated.

Maximum
Deviation

These fields are available only when both the Drawdown Attribute and Reference Attribute
fields contain a value.

5. Save the mandate definition using File - Save.

2.14 Cashflow groups (optional)
Cashflows can be grouped together to be used for reporting or analysis purposes, for example, in
Report Generator and Debt Monitor, respectively. They are also used to define the order of cashflow
allocation in Payment Allocation Manager.
For example, by specifying a cashflow group when monitoring portfolios in Debt Monitor, a global
amount can be broken down into its different components (such as Principal, Fee, and Interest).
These cashflows can then be broken down even further. Fees, for example, could be broken down
into Issuer Fee and Tax.
Each type of cashflow needs to be defined individually in the main cashflow group, with a priority.
The priority defines the order in which the rule matching is done.
Group rules are set up for the cashflow group to define how the cashflows are identified. You can
define more than one rule within a group and specify different criteria that the cashflow should or
should not meet. All criteria need to be matched in order to include the cashflow within the group.
When all excluding criteria is matched, the cashflow is excluded from the group. Inclusive or

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2.14 Cashflow groups (optional)

exclusive criteria can be used in the same rule. You can also set up a miscellaneous group rule for all
other cashflows. This rule would have the lowest priority and be completely open.
Cashflow groups are defined in Cashflow Group Editor.
To define a cashflow group:
1. In Cashflow Group Editor, define the main attributes of the cashflow group in the upper part of
the editor.
Information

Description

ID & Name

Unique ID and name for the cashflow group.

Domain

Domain in which this cashflow group is available.

Switches

Payment Reminder Grouping: switch on so that this cashflow group is used for
grouping the cashflows in the Payment Reminder entities. Only one cashflow group
can be used at a time for grouping cashflows. To use a different cashflow group, the
switch must set to off for this cashflow group.

2. In the Groups page, define the main group using the information in the following table:
Information

Description

Group

ID and name of the main cashflow group.

Group Name
Priority

Number used to determine the priority if two or more cashflow groups meet the
conditions for the selected rules.

3. In the Group Rules page, define the criteria that each cashflow should meet to match the group
rule, using the information in the following table:
Information

Description

Group

ID and name of the main group you created in the Groups page.

Group Name
Main Type

Main type of cashflow, such as Principal or Fee/Tax.

Type

Cashflow type as defined in Cashflow Type Editor.

Attributes

Different attributes that the cashflow must have to meet the rule criteria.

Attributes 2nd
Kinds
Sign

Sign that the cashflow must have to meet the rule criteria.

4. Save the cashflow group using File - Save As New.

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Chapter 3

Managing amount events

Amount Event Manager is used for processing amount events on loan entities (for example, facilities
or tranches). Amount events are used to amend the available credit or subsidy amount under a loan
agreement.
In Amount Event Manager, it is possible to carry out the following:

•

Mandate subsidy estimation

–

Facility subsidy estimation which reduces the available mandate subsidy amount

–

Facility or tranche credit amendment (or cancellation) arising from a change in the contract
conditions associated with the loan

Credit transfers (between two facilities or between tranches in one facility).

All amount events are controlled by a mandatory Active From Date and an optional Active To Date,
defining their useful life.

3.1 Amount Event Manager
Amount Event Manager is an application which is based on the Transaction Manager application
layout.
In Amount Event Manager, you can manipulate certain aspects of loan agreement related events
that have implications on the overall availability of credit or subsidy amounts.
Amount events can be managed in a similar way to transactions using similar state and mode
concepts as those in Transaction Manager’s process flow.

3.1.1 Amount Event Manager menus
The following tables describe the menu items which are specific to Amount Event Manager and any
layout or mode which is based on the application.
Other menu items which are common to all manager applications are described in the TRM User
Guide.

3.1.1.1 View
Menu item

Description

Amount Event Query

Displays the Query view.
This view is used to retrieve amount events that are already in the system for further
processing.

Amount Entity

Displays the Amount Entity view.
This view displays the amount entities that result from amount events.

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3.2 Processing amount events

3.1.1.2 Command
Menu item

Description

Apply

Allows you to carry out different types of commands on amount events to move them
forwards or backwards in the process flow.

Accept
Reject
Cancel

3.1.1.3 New
Menu item

Description

New Subsidy
Estimation

Allows you to carry out amount events on facilities and tranches (and also on
mandates or approvals, if these are used in your commercial lending operations):

New Credit
Amendment

•

3.2.1 New subsidy estimation on page 50

•

3.2.2 New credit amendment on page 53

•

3.2.3 New credit transfer on page 55.

New Credit Transfer

3.1.2 Start-up parameters
Amount Event Manager is a special Transaction Manager layout, designed specifically for processing
amount entity events through the process flow.
The start-up parameter used to open the Amount Event Manager layout is:
FKTransactionManager.exe -c AE.xml --view amount-event
See the TRM User Guide for information about the options available.

3.1.3 Customizing Amount Event Manager
You can customize Amount Event Manager according to your personal preferences by selecting the
views you want to be displayed from the View menu, selecting the columns you want to see in each
view, and moving and rearranging the selected views in the window.
You can save the current display by saving it as a layout in the Layout menu using Layout - Save. You
can create and save multiple layouts either for your own personal use, or to be shared by other
users.
When you start the application, the default layout is automatically displayed. You can create as
many layouts as you require and tailor each view according to the amount event you are capturing.
The views in the layout are displayed as individual windows: you can detach and reposition the
views in Amount Event Manager in the same way as you can reposition the sub-windows in
Transaction Manager: see the TRM User Guide for more information.

3.2 Processing amount events
The following sections describe the amount events that can be carried out on entities in Amount
Event Manager.

3.2.1 New subsidy estimation
The funds made available under a mandate are distributed among borrowers that meet the terms
and conditions set out in the mandate by the donor or guarantor.

3 Managing amount events
3.2 Processing amount events

A facility subsidy estimation reduces the available mandate amount. When the terms set out in a
mandate are very specific (where it is explicitly mentioned the type of project or borrower that can
benefit from the subsidy) it is important that any changes to the available subsidy are authorized by
the contributor of the funds.
Authorization of a subsidy estimation is done in Amount Event Manager.
To create an amount event for subsidy estimation:
1. In Amount Event Manager, select New Subsidy Estimation.
2. In the resulting dialog, enter the data for the subsidy estimation.
Note that some of the values in the dialog may be automatically filled with data relevant to the
selected Entity Type or Sub-Entity Type.
Information

Description

Opening Date

Opening date of the subsidy estimation. By default, this is today’s date.

Active From Date

Date from when the estimation is active: it cannot be before the Active From Date
defined in the entity’s definition. By default, this is today’s date.

Event Type

Subsidy Estimation.

Entity Type

Facility (or Mandate).

Entity ID

ID of the entity defined as the Entity Type.

Sub-Entity Type

Type of sub-entity (for example, Mandate).

Sub-Entity ID

ID of the sub-entity.

Estimation
Method

Manual or Simulated Drawdown.

Simulation
Portfolio

Simulation portfolio if Estimation Method = Simulated Drawdown.

Simulation
Package Type

Simulation package type if Estimation Method = Simulated Drawdown.

Simulation
Package

Simulation package if Estimation Method = Simulated Drawdown.

Currency

Displays the currency of the relevant Entity ID selected above.

Currency 2

Displays the currency of the relevant Sub-Entity ID selected above.

FX Rate

Displays the FX rate between Currency and Currency 2 when different currencies are
involved.

Old Amount

Displays the latest open subsidy amount.

Used Amount

Displays the latest used subsidy amount.

Estimate Amount

Enter the estimate amount if Estimation Method = Manual.

Estimate Add-On
%

Value is taken from the value specified in the mandate.

Event Amount

Enter the amount if Estimation Method = Manual.

New Amount

This field does not display a value.

See 2.13 Mandates (optional) on page 43.

3. Click OK.

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A new row is created in the Amount Event view and displays the following data.
Information

Description

Event ID

Event ID generated automatically by the system after the amount event is saved.

Event Type

Displays the value Subsidy Amount.

State

Displays the current state of the amount event.

Old Amount

The system calculates the Open Subsidy and displays the value.

Used Amount

The system calculates the Used Amount and displays the value.

Estimate Amount

This defaults from the value entered in the dialog if entered manually.
If Estimation Method = Simulated Drawdown, this figure is calculated.

Estimate Add-On
%

This defaults from the value entered in the dialog.

Event Amount

Event Amount =
(Estimate Amount * (1 + Estimate Add-on%) + Used Amount – Old Amount)

New Amount

New Amount = Event Amount + Old Amount

The following data displays in the Amount Entity view.
Information

Description

Amount Entity ID

Unique ID of the resulting amount entity.

Event

Defaulted from the amount event.

Affect Entity

Displayed by the system: for example, Facility.

Affect Entity ID
Affect Sub-Entity

Displayed by the system: for example, Mandate.

Affect Sub-Entity
Id
Causing Entity

Displayed by the system: loan entity causing this event.

Causing Entity Id
Amount Type

Amount type and subtype related to the Affect Entity.

Amount Subtype
Flags

Flags the amount entity as Committed if it is from a Committed Amount; or Pseudo if
it originates from a simulated drawdown.

Effective Date

Date from which the amount entity is effective.

Subsidy Rate

Subsidy rate applicable to the Affect Entity.

Subsidy IRR

Subsidy IRR rate, where applicable.

Subsidy Pricing
Date

Date from which the quote was taken to calculate the Subsidy IRR in the simulated
drawdown.

4. Select the new amount event and one of the following actions from the Command menu:

–

Apply to save the amount event and set its state to Open or Register

–

Validate to save the amount event and move its state forward in the process flow.

3 Managing amount events
3.2 Processing amount events

3.2.2 New credit amendment
Facility credit amounts represent the amount that can be borrowed under a given facility. During the
lifetime of a facility, the credit amount can go up or down. A cancellation of a credit amount can be
for all or part of the unutilized amount.
Once a facility definition has been set up and fully validated and approved, it is still possible to
modify some of the facility’s attributes in Facility Editor (apart from the credit amount): see 2.9.4
Modifying facilities on page 37.
If the amount of available credit under the facility needs to be modified (either increased,
decreased, or canceled), the amendment must be done in Amount Event Manager.
To be able to amend the facility’s credit amount, the facility must meet the following conditions:

•

The facility definition must have reached the final state in the facility process flow

•

The facility must have no related events (for example, a drawdown transaction), that are in a
state that is less than the final state.

To amend a credit amount:
1. In Amount Event Manager, select New Credit Amendment.
2. In the resulting dialog, enter the data for the credit amendment.
Note that some of the values in the dialog may be automatically filled with data relevant to the
selected Entity Type or Sub-Entity Type.
Information

Description

Opening Date

Opening date of the credit amendment. By default, this is today’s date.

Active From Date

Date from when the amendment is active: it cannot be before the Active From Date
defined in the entity’s definition. By default, this is today’s date.

Event Type

Credit Amendment.

Event Subtype

Choose from: Increase, Manual Revolving, or Cancel.

Entity Type

Automatically populated based on the Event Type and Event Subtype.

Entity ID

ID of the entity to be affected by the amendment.

Sub-Entity Type

Automatically populated based on the Event Type and Event Subtype.

Sub-Entity ID

ID of the sub-entity to be affected by the amendment, for example, an approval that
is linked to the facility, or a tranche.
Note: Only the tranches of the selected facility are available when Own Credit Amounts
is switched on for the facility.

Currency

Automatically populated based on the currency of the amount event's entity.

Currency 2

Automatically populated based on the currency of the approval.

FX Rate

Automatically populated based on the FX rate of the facility: the conversion rate
between the entity currency and the sub-entity currency.

Old Amount

Automatically calculated by CLM: sum of all amounts from the amount entity with an
existing Used Amount before this amendment.

Used Amount

Automatically calculated by CLM: sum of all amounts from the amount entity with an
existing Used Amount before this amendment.

Available Amount

Available Amount = Old Amount - Used Amount

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3.2 Processing amount events

Information

Description

Event Amount

Automatically calculated by CLM as:
•

If Event Subtype = Increase, then Event Amount = 0

•

If Event Subtype = Cancel, then Event Amount = Available Amount * -1

This value can be modified.
Note: You can enter any one of the following three values and the other two values
will be calculated automatically:
- Event Amount
-

Entity New Amount

New Available Amount.

New Amount

New Amount = Old Amount + Event Amount

New Available
Amount

New Available Amount = New Amount - Used Amount

3. Click OK.
A new row is created in the Amount Event view and displays the following data.
Information

Description

Event ID

Event ID generated after saving the amount event.

Event Type

Displays the value Credit Amendment.

State

Displays the state of the loan amount event.

Old Amount

Amounts automatically calculated by CLM.

Used Amount
Event Amount
New Amount

The following data displays in the Amount Entity view.
Information
Amount Entity ID

Description
Unique ID of the resulting amount entity.
A second entity is created if an approval is present.

Event

Unique ID of the amount event from which the amount entity is created.

Affect Entity

Displayed by the system, for example, Facility.

Affect Entity ID
Affect Sub-Entity

Displayed by the system, for example, Mandate.

Affect Sub-Entity
Id
Causing Entity

Displayed by the system: loan entity causing this amount event.

Causing Entity Id
Currency

Currency of the amount entity.
Note: Currency 2 displays the currency of the approval, if one is present.

Amount

Amount of the event.
For an amount entity resulting from an approval: Amount = FX Rate * Event Amount

Amount Type

Credit Amount

3 Managing amount events
3.2 Processing amount events

Information

Description

Amount Subtype

Open Amount (or Used Amount for an approval).

Effective Date

Active from date of the amount event.

4. Select the new amount event and one of the following actions from the Command menu:

–

Apply to save the amount event and set its state to Open or Register

–

Validate to save the amount event and move its state forward in the process flow.

3.2.3 New credit transfer
Each tranche in a facility can have its own specific credit amount. A credit amount can be transferred
from one tranche to another within the same facility, or from one facility to another.
If a credit is transferred between two facilities, a link is created between them.
To transfer a credit amount:
1. In Amount Event Manager, select New Credit Transfer.
2. In the resulting dialog, enter the event data for the credit transfer.
Note that some of the values in the dialog may be automatically filled with data relevant to the
selected Entity Type or Sub-Entity Type.
Information

Description

Opening Date

Opening date of the credit transfer. By default, this is today’s date.

Active From Date

Effective date of the amount entities generated by this event: it cannot be before the
Active From Date defined in the entity’s definition. By default, this is today’s date.

Event Type

Credit Transfer.

Event Subtype

Choose from: Increase or Decrease.
Note: The increase/decrease applies to the Entity ID and the opposite applies to the
Target Entity ID.

Entity Type

Facility: automatically populated by CLM.

Entity ID

ID of the facility that is the object of the credit transfer.

Sub-Entity Type

Automatically populated by CLM: for example, Approval, if the facility is linked to an
approval, or Tranche, if the object of the credit transfer is a tranche.

Sub-Entity ID

ID of an approval (in a facility) or tranche:

Target Entity ID

•

For a facility, this value is automatically populated by the ID of the approval to
which the facility is linked.

•

For a tranche, select the ID of the target tranche to be affected by the credit
transfer from the list of tranches linked to the same facility (when the Own Credit
Amounts switch is on).

ID of the target entity (facility or tranche):
•

For a facility, ID of the target facility to be affected by the transfer.

•

For a tranche, ID of the target tranche to be affected by the credit transfer from
the list of tranches linked to the same facility (when the Own Credit Amounts switch
is on).

Currency

Currency of the facility: automatically populated by CLM.

Currency 2

Currency of the approval, if the facility is linked to an approval.

Fx Rate

FX rate between the facility currency and the approval currency, if the facility is linked
to an approval.

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3 Managing amount events
3.2 Processing amount events

Information

Description

Target Currency

Currency of the target facility.

Target FX Rate

Conversion rate between the entity currency and the sub-entity currency.
This defaults to the FX spot rate of the currency pair (Currency/Target Currency) but can
be modified.

Old Amount

Automatically calculated by CLM: sum of all amounts from the amount entity with an
existing Open Amount before this transfer.

Used Amount

Automatically calculated by CLM: sum of all amounts from the amount entity with an
existing Used Amount before this transfer.

Available Amount

Available Amount = Old Amount - Used Amount

Target Old
Amount

Automatically calculated by CLM: sum of all amounts from the amount entity with an
existing Open Amount of the target entity before this transfer.

Target Used
Amount

Automatically calculated by CLM: sum of all amounts from the amount entity with an
existing Used Amount of the target entity before this transfer.

Target Available
Amount

Target Available Amount = Target Open Amount - Target Used Amount

Event Amount

Automatically calculated by CLM as:
•

If Event Subtype = Increase, then Event Amount = Target Available Amount / Transfer
FX Rate

•

If Event Subtype = Decrease, then Event Amount = Available Amount * -1

This value can be modified.
Note: You can enter any one of the following four values and the other two values will
be calculated automatically:
- Event Amount
-

Target Event Amount

New Amount

New Available Amount.

Target Event
Amount

Target Event Amount = Event Type * Transfer FX Rate * -1

New Amount

New Amount = Old Amount + Event Amount

New Available
Amount

New Available Amount = New Amount - Used Amount

Target New
Amount

Target New Amount = Target Old Amount + Target Event Amount

Target New
Available Amount

Target New Available Amount = Target New Amount - Target Used Amount

A new row is created in the Amount Event view and displays the following data.

Information

Description

Event ID

Event ID generated after saving the amount event.

Event Type

Displays the value Credit Transfer.

State

Displays the state of the loan amount event.

3 Managing amount events
3.2 Processing amount events

Information

Description

Old Amount

Automatically calculated by CLM.

Used Amount
Event Amount
New Amount

Amount entities are created both for source and target entities, showing details of the effects on
the entities (in this case, facility or tranche) which are affected by the new amount event.
Information

Description

Unique IDs of the amount entities.

Event ID

Unique IDs of the amount event from which the amount entities were generated.

Causing Entity

Details of the causing amount event.

Causing Entity ID
Affect Entity

Details of the facility to which the tranches belong.

Affect Entity ID
Affect Subentity

Details of the source tranche and target tranche.

Affect Subentity
ID
Currency

Currency of the facility.

Amount

Event Amount and Target Event Amount.

Amount Type

Credit Amount.

Amount Sub-type

Open.

Effective Date

Active from date.

3. Select the new amount event and one of the following actions from the Command menu:

–

Apply to save the amount event and set its state to Open or Register

–

Validate to save the amount event and move its state forward in the process flow.

Commercial Loans Module (CLM) User Guide

3 Managing amount events
3.2 Processing amount events

Chapter 4

Managing drawdowns

Drawdown Manager is used to initiate, process, and query on drawdown transactions in a similar
way to normal TRM transactions in Transaction Manager.
Drawdowns pass through a configurable transaction flow where the data can be verified by
additional users, and other details can be added such as settlement instructions (if there are no
existing standard instructions).
Drawdowns are always entered under a facility and a tranche. Most of the drawdown information is
predefined in the facility or tranche definition using transaction templates. Any remaining
information is entered at the time of drawdown entry.
A schedule is part of the drawdown transaction. The method of using schedules for commercial loans
is slightly different from the way they are used to define the cashflow structures of normal TRM
transactions: the first set of schedule definitions is always inherited from the transaction template
attached to the drawdown. However, under certain circumstances you can delete the schedules that
are defaulted from the transaction template and/or add new secondary schedules.
Cashflows are generated as soon as the data has been entered into the drawdown transaction and
schedules. In the pre-configured setup of CLM, you cannot change the values in the cashflows for
drawdowns on commercial loans. You can only view the details of individual cashflows in Drawdown
Manager’s Cashflow view.

4.1 Drawdown Manager
Drawdown Manager is an application which is based on the Transaction Manager application layout.
In Drawdown Manager, you can enter the details of a drawdown: CLM retrieves the data from the
facility setup and completes all of the contractual fields that it can. In the simplest case, you only
need to enter a small amount of data at drawdown entry, such as, the amount of the drawdown, and
the value and maturity dates.
CLM verifies that the values you entered correspond to the loan agreement and issues warning or
error messages when appropriate, for example, if credit limits, sublimits or drawdown conditions are
violated.
Drawdowns can be managed in a similar way to transactions using similar state and mode concepts
as those in Transaction Manager’s process flow.

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4 Managing drawdowns
4.1 Drawdown Manager

4.1.1 Drawdown Manager menus
The following tables describe the menu items which are specific to Drawdown Manager and any
layout or mode which is based on the application.
Other menu items which are common to all manager applications are described in the TRM User
Guide.

4.1.1.1 View
Menu item

Description

Loan Pricing
Parameter

Displays the Loan Pricing Parameter view.
This view is used to display information relating to the pricing of the drawdown and is
read-only.
See 4.2.3 Pricing drawdown transactions on page 65.

4.1.1.2 New
Menu item

Description

Drawdown

Allows you to enter a drawdown transaction.
See 4.2.1 Entering drawdown transactions on page 61.

Equity

Allows you to enter an equity investment on a drawdown.
See 6.2.1 Entering new equity investments on page 104.

4.1.2 Start-up parameters
Drawdown Manager is a special Transaction Manager layout, designed specifically for processing
drawdowns through the process flow.
The start-up parameter used to open Transaction Manager’s Drawdown Manager layout is:
FKTransactionManager.exe -c DM.xml

Note: The Drawdown Action mode of Drawdown Manager is designed specifically for processing
loan events on drawdown transactions.

4.1.3 Customizing Drawdown Manager
You can customize Drawdown Manager according to your personal preferences by selecting the
views you want to be displayed from the View menu, selecting the columns you want to see in each
view, and moving and rearranging the selected views in the window.
You can save the current display by saving it as a layout in the Layout menu using Layout - Save. You
can create and save multiple layouts either for your own personal use, or to be shared by other
users.
When you start the application, the default layout is automatically displayed. You can create as
many layouts as you require and tailor each view according to the type of drawdown you are
capturing.
The views in the layout are displayed as individual windows: you can detach and reposition the
views in Drawdown Manager in the same way as you can reposition the sub-windows in Transaction
Manager: see the TRM User Guide for more information.

4 Managing drawdowns
4.2 Processing drawdowns

4.2 Processing drawdowns
A drawdown transaction is used in CLM to transfer funds between the lender and borrower.
A drawdown has the following characteristics:

•

A drawdown is always entered under a facility and a tranche

•

A drawdown uses a transaction template to default the schedule structure

•

A drawdown has a process flow that is different from that of a normal TRM transaction.

This section describes the steps you need to take to enter new drawdown transactions in Drawdown
Manager, and to save them and move them forward in the process flow.

4.2.1 Entering drawdown transactions
To enter a new drawdown transaction:
1. In Drawdown Manager, select New - Drawdown.
2. Enter the drawdown information in the new transaction row in the Transaction view.
The following table describes the information required to enter a drawdown. Note that most of
the values are populated automatically according to the definition of the facility or tranche you
select.
Column

Description

Facility

Facility to use in the drawdown.

Tranche

One of the tranches belonging to the facility that you want to use in the drawdown. If
there is only one tranche, this is used by default.

Counterparty

Counterparty for the drawdown.

Instrument

Instrument to be used for the drawdown.

Transaction
Template

Transaction template used to default the schedule structure for the drawdown.

Currency

The template is linked to the following:
•

The selected instrument to be used for the drawdown, if the Facility Templates Only
switch is off in the Instrument page definition of the facility

•

Facility, tranche, and instrument to be used for the drawdown, if the Facility
Templates Only switch is on in the Instrument page definition of the facility.

Currency of the drawdown.
•

If the Include All Currencies switch is on in the facility definition, all currencies are
available for selection

•

Only the currencies defined for the facility (or tranche) in the Drawdown Currency
page are available for selection, if the Include All Currencies switch is off in the
facility definition.

Nominal Amount

Nominal value of the drawdown.

Credit Currency

Currency of the facility as defined in the facility definition.

Credit Amount

Nominal amount of the drawdown expressed in the Credit Currency.

FX Rate Method

Fx rate method as defined in the Drawdown Currency page definition of the facility.
If the Include All Currencies switch is on in the facility definition, CLM sets the FX Rate
Method with the following logic:
•

If Drawdown Currency = Credit Currency, FX Rate Method = Fixed (the column is
frozen)

•

If Drawdown Currency is different from the Credit Currency, FX Rate Method = Not
Fixed.

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4 Managing drawdowns
4.2 Processing drawdowns

Column

Description

FX Rate Status

FX Rate Status defined by the system.
•

If FX Rate Method = Fixed, then FX Rate Status = Final

•

If FX Rate Method = Not Fixed, then FX Rate Status = Provisional (until the rate is
fixed).

FX Fixing Offset

Number of days before the value date of the drawdown used to fetch the FX rate.

FX Fixing Date

FX Fixing Date = Value Date – FX Fixing Offset

FX Rate

Exchange rate between the Credit Currency and the Drawdown Currency.
If the currencies are the same, then the rate is set to 1 and frozen.

Deal Price

Price at which the current drawdown is being entered:
•

If Deal Price = 100, then Book Value = Nominal Amount

•

If Deal Price is less than 100, then Book Value is less than the Nominal Amount

•

If Deal Price is greater than 100, then Book Value is greater than the Nominal
Amount.

Opening Date

First date the drawdown transaction is taken into account in calculations. By default,
this is today’s date.

Value Date

Date on which the drawdown transaction is settled: this is on or after the opening
date.
If this date does not fall on a business day, the system warns you by changing the
color of the display, and adjusting the date based upon the Convention supplied in the
schedule.
The value date should be equal to or later than the facility’s Active From Date and the
tranche’s Drawdown Period Start values, otherwise the system will not allow the
transaction to be saved.

Maturity Date

Date for the maturity of the drawdown that can be any date later than the value date.
The maturity date should be equal to or earlier than the facility’s Active To Date and the
tranche’s Last Repayment Date values, otherwise the system will not allow the
transaction to be saved.

Portfolio

Portfolio into which the drawdown is entered.

Owner

Owner of the facility and tranche.

Date Basis

Date basis used to calculate cashflows.
This value can be provided either at transaction level; in which case it would apply to
all schedules and cashflows of the drawdown; or alternatively, a different date basis
can be selected for each schedule at schedule level.

Location

(Optional)
Project location taken from the facility or tranche definition. This value can be used to
control the automatic setting of Minimum Payment Stub Length for schedules.

Mandate

(Optional)
Mandate taken from the facility or tranche definition (only used for treating subsidized
drawdowns).

Funding Type

(Optional)
Funding type taken from the facility or tranche definition (only used to identify the
source of the funds being disbursed).

4 Managing drawdowns
4.2 Processing drawdowns

Column

Description

Counterparty
Beneficiary

(Optional)
Counterparty beneficiary for the counterparty selected from the facility or tranche
definition.
If the counterparty of the drawdown is not the intended recipient of the disbursement
amount, then the Counterparty Beneficiary field is used.
Note: This represents the client in favor of whom the drawdown is being undertaken:
all the cashflows from the drawdown would use the Counterparty Beneficiary as
the payment client.

3. For a simple drawdown transaction, a minimum of information must be defined in the schedules,
either predefined in the transaction template or specified at drawdown entry.
The following information needs to be defined at schedule level:
Column

Description

Rate

Rate to be used for calculating the cashflows generated by the schedule.

Rate Type

Rate and Rate Type are interpreted together by the system.

Frequency

Frequency and methods used for the calculation/payment of cashflows resulting from
the schedule.

Method
Calculation
Method

The values defined for Frequency, Method, and Calculation Method are interpreted
together by the system to determine the number of cashflows to be produced for a
particular schedule during the life-time of the drawdown and the amount of each
cashflow.
For example:
•

•

Convention

If Schedule = Interest
-

Frequency = 2, Method = Times/Year, and Calculation Method = Null

The system interprets this information as a semi-annual calculation of
interest.

If Schedule = Amortization
-

Frequency = 2, Method = Times/Year, and Calculation Method = Linear

The system interprets this as semi-annual linear-amortization.

If Schedule = Amortization
-

Frequency = Null, Method = Bullet, and Calculation Method = Null

This will create one single amortization payment.

If Schedule = Interest
-

Frequency = 1, Method = ISDA Date Q, and Calculation Method = Null

The system interprets this as a quarterly calculation of interest on 15th March,
15th June, 15th September, and 15th December of each year.

Convention to use to determine how payment dates are adjusted if the value date falls
on a non-business day or how the value date is adjusted if Adjust Value Date = Yes.
Choices are: None, Backward, Following, Modified Backward, or Modified Following.

Spread

Additional spread to add on top of the rate.

Fixed Roll Date

Cashflows are generated with this date as an anchor.

Start Date

Normally, this date is set automatically using the value date of the drawdown.
However, if you want the schedule’s cashflows to start from any other date, enter the
date in this field.

First Date

This date is used if the first cashflow for the schedule has to be generated from a
specific date.

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4 Managing drawdowns
4.2 Processing drawdowns

Column

Description

End Date

Normally, this date is set automatically using the maturity date of the drawdown.
However, you can set this date to any other date prior to the maturity date.

Payment Adjust
Method

If the payment dates of the cashflows generated from a schedule need to be adjusted,
select the appropriate Payment Adjust schedule.

Penultimate Date

Value date of the last-but-one cashflow generated from this schedule.

Expression

Expression used to determine the calculation of cashflows.
See the guide TRM Instruments: Processing and Calculations for more information.

Roll from Start

Yes or No to determine whether the system generates cashflows from the value date
downwards to the maturity date, pushing any stubs towards the end of the calculation
period.

Fixing Calendar

Parameters used to calculate the rates and dates used to fix cashflows generated by
the schedule.

Fixing Convention
Fixing Rate
Fixing Period
Payment Client

Payment client of the schedule if it is different from the payment client of the
drawdown.

Adjust Value Date

Determines whether a value date falling on a non-business day will be adjusted
according to the selected convention (Backward, Following, Modified Following, and so
on). Adjusting the value date will affect the calculation of the interest amount.
•

Select Yes if you want the value date to be adjusted.

•

Select Yes, Except First/Last if you want the value date to be adjusted except for the
first and/or last interest periods.

•

Select Yes, Except First or Yes, Except Last, if you want the value date to be adjusted
except for the start date of the first or the end date of the last interest period. For
example, if you selected Yes, Except Last then the end date of the last interest
period will not be adjusted.

Some pricing information can be given after the new drawdown has been entered, but before it
has been applied or committed: see 4.2.3 Pricing drawdown transactions on page 65 for
information about loan pricing at drawdown entry.

4.2.2 Approving drawdown transactions
When you are satisfied with the drawdown transaction, select one of the following actions from the
Command menu:

•

Apply to save the drawdown and not change the state

•

Commit to save the drawdown and move its state forward in the transaction flow.

Once a drawdown transaction has been applied or committed, some information is automatically set
by the system:

•

Transaction Number: identifies the drawdown transaction in the system.

•

State: shows the transaction’s position in the workflow

•

Status: gives additional information about the status of the deal

•

Transaction Type: defines the transaction as a drawdown transaction (or a loan event transaction
if the new transaction results from a loan event).

If you need to cancel the drawdown transaction: see 4.2.4 Cancelling drawdown transactions on
page 67.

4 Managing drawdowns
4.2 Processing drawdowns

4.2.3 Pricing drawdown transactions
All transactions including new drawdowns and various types of transactions created from drawdown
events are priced in an identical manner. The only difference is that these transactions carry
different schedules, and different rate conditions have been set up for them. Consequently, different
rates are found for the transactions.
Pricing can be launched either for the whole transaction or for a single schedule. Typically, however,
the Pricing action is launched for the whole transaction.
In both cases, pricing is done at the schedule level of the transaction. Each schedule is priced
separately and with its own pricing logic. As a result of one execution of the Pricing action for the
whole transaction, you may (for example, for a new drawdown) do one of the following:

•

Execute a theoretical zero-coupon curve based valuation for the base interest schedule

•

Identify a direct quote rate for the mark-up component from a yield curve selected based on the
location of the transaction

•

Identify a fixed rate for the subsidy component based on the mandate (or facility or tranche)
setup of the drawdown.

Pricing is executed as part of the process flow of the transaction it targets (new drawdown, Rate
Revision, and so on).

Note: Before the Pricing action can be performed on a drawdown, the Loan Pricing loan event
needs to be set up: see 5.2.10 Loan pricing on page 98.

To price a drawdown transaction:
1. Select the drawdown transaction you want to price.
Some pricing information can be given after the new drawdown has been entered, but before it
has been applied or committed.
Information

Description

Pricing Date

Identifies the date as of which all market rates needed in pricing (yield curve quotes)
are taken from the database.

Pricing
Subscenario

•

In a new transaction or an existing transaction which has not been priced before,
this field is blank.

•

If an existing transaction has already been priced before this field contains the
Pricing Date that was used at that time and that is saved with the transaction.

Identifies the rate scenario from which all market rates needed in pricing (yield curve
quotes) are taken from the database.
•

The scenario may be initially set up (for example, in the schedule template) but
can be manually modified if the transaction template setup allows.

Note that this information is only required if "real" pricing against yield curve quotes is used.
When only fixed rates are set up as global rate conditions, or entity-specific rate conditions are
used, these fields are not required.
2. Right-click the transaction (either on an individual schedule or on the actual transaction) and
select Pricing.
The system propagates the pricing-related data (rates or market references needed for finding
the rates) to the schedule being processed based on the matching Rate Condition loan event.

–

If no Pricing Date is given, the date automatically defaults to the current date.

–

If no Pricing Subscenario is given, this automatically defaults to the scenario named Default.

After all values have been propagated based on the selected Rate Condition loan event, CLM
automatically triggers the second step of the pricing to identify the final value for the Rate field in
the Schedule view if Pricing Method = Direct Quote or Zero Pricing.

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4 Managing drawdowns
4.2 Processing drawdowns

See 5.2.10 Loan pricing on page 98 for more information about the loan event.

4.2.3.1 Pricing rate renewal or indexation
Pricing of a Rate Renewal transaction or an indexation is a special case of pricing, since it is done in
an existing transaction after the value date as an event which does not create a new transaction.
Instead, pricing the transaction simply updates a value to the Nominal Rate field of one or several
existing cashflows in the transaction and calculates the cashflow amount accordingly.
This type of pricing is actually done in two steps at different times in the transaction’s life cycle. The
conditions for future rate renewal and indexation are stored in each cashflow based on the following
Schedule fields:
Information

Description

Fixing Offset

Controls the Fixing To Date of the cashflow.

Maximum Fixing
Offset

Controls the Fixing From Date of the cashflow.

Fixing Rate

Identifies the market reference (for example, a yield curve or an index), from which
the rates used in rate renewal are taken.

Fixing Period

Identifies the period (for example, 3 months - 3M), from which rates on a yield curve
are taken.

Expression

Identifies the calculation used in producing the rate based on market rates.

These values may be provided at drawdown entry by one of the following: the transaction template,
a matching Rate Condition loan event, or those manually given by the user entering the transaction.
When a rate renewal or indexation of a transaction is launched, CLM identifies the following:

•

Cashflows affected by the fixing based on the Fixing Date.

•

Market rates required for calculating the Fixing Quote for the cashflow (for example, from the
Fixing Rate and Fixing Period).

•

Expression used in calculating the Nominal Rate from the market rates.
For example:

–

A typical expression for a rate renewal would be:
"ir+spread%"

–

A typical expression for an indexation (of an interest schedule) would be:
"factor * ((ix / divider)-1)"
where:
“factor” = fixed interest rate of base interest schedule
“ix” = current index value (at the time of indexation)
“divider” = index base value (at the time of creating the transaction)

CLM uses the expression to calculate the nominal rate, then calculates the cashflow amount
(next interest or indexation adjustment) using the nominal rate.
See TRM Instruments: Processing and Calculations for more information about expressions.

Note: Rate Revision is not covered by this treatment, but is modeled as a separate transaction

with a fixed interest rate schedule, with the schedule’s Start Date and End Date corresponding
to the respective revision period dates. Consequently, the new revision period in the Rate
Revision transaction is priced with the same logic as any other fixed rate schedule.

4 Managing drawdowns
4.3 Drawdown mirroring

4.2.3.2 Loan pricing simulation
Ad-hoc pricing, not related to real drawdowns, is best done in a separate application used for
entering simulated drawdowns or event transactions. The Simulation mode of Drawdown Manager is
used for this purpose.
Drawdown Manager’s Simulation mode allows you to save the transactions in the database in case
the simulated structure used in the pricing needs to be kept for future reference. This also ensures
that a drawdown used in ad-hoc pricing is not entered by mistake into the real drawdown process
flow. You can set up a single simulation facility to enter these simulation drawdowns.

4.2.4 Cancelling drawdown transactions
To cancel a validated drawdown (or loan event) transaction:
1. Retrieve and select the drawdown transaction you want to cancel.
2. Add a comment justifying the cancellation of the transaction in one of the Comment fields.
3. Select Command - Cancel or Reject to cancel the drawdown transaction and move it back in the
process flow.

Note: If you cancel a Prepayment event transaction, CLM verifies if a payment allocation

containing the prepayment flows of the prepayment exists. If there is no existing payment
allocation, CLM assigns the Prepayment transaction into the next process state.

4.3 Drawdown mirroring
CLM enables you to mirror facilities and their related drawdowns using internal deal mirroring (IDM).
The mirror child facility is generated automatically when the parent facility is defined: see 2.9.5
Mirroring facilities on page 37 for more information.
When you enter a drawdown under a parent facility in Drawdown Manager, the corresponding
reversed drawdown is created automatically under the mirror child facility, if the necessary IDM
configuration is in place in Portfolios, Clients and Instruments.
The drawdown and its mirror can be entered (and modified) from the either perspective. The same
can be said for certain key loan events such as Prepayments and Transaction Condition Conversion.

Note: As is the case for TRM’s internal deal mirroring, facility and drawdown mirroring also

require some additional transaction flow configuration. See the TRM User Guide and the
TRM System Administration Guide for more information.

4.3.1 Setting up static data for drawdown mirroring
The mirror child facility is generated automatically when the parent facility is defined: see 2.9.5
Mirroring facilities on page 37 for more information.

Note: For information about the values or configuration needed for internal deal mirroring in

general in TRM (for example, portfolios, clients, instruments, permissions, and so on), see
the TRM User Guide.

4.3.2 Processing drawdown mirroring
This section describes the processing procedures for drawdown mirroring.

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4 Managing drawdowns
4.3 Drawdown mirroring

4.3.2.1 Generating drawdown mirroring
Drawdown mirroring in CLM works in a similar way to internal deal mirroring in TRM.
To mirror a drawdown transaction:
1. Enter the drawdown information for the parent or child facility (as described in 4.2.1 Entering
drawdown transactions on page 61).
2. Save the drawdown transaction and move it forward in the transaction flow using the options in
the Command menu.
When the drawdown entered under the mirror parent or child reaches the appropriate state in
the deal mirroring flow, the reverse drawdown under the mirror child or parent facility is
generated.
3. Save either drawdown transaction using the options in the Command menu.
When the drawdown entered under the mirror parent or child is saved, the mirror child or parent
drawdown is also automatically saved.
You can also move both drawdown transactions back in the process flow by selecting the
appropriate command on the parent drawdown.
4. Before the mirrored drawdowns reach the final state, make any changes to the parent: the
change is automatically reflected on the mirror child.
5. Confirm the transactions using the options in the Command menu.
6. When the transactions have reached the final state in the deal mirroring process flow, you can
execute some loan events (for example, Fixing) on the drawdowns: see the following section for
more information.

Note: For information about configuring the deal mirroring process flow: see the TRM System
Administration Guide.

4.3.2.2 Executing loan events on mirrored drawdowns
Once the mirrored drawdowns have reached the final state in the deal mirroring process flow, you
can perform some loan events on the mirror parent (for example, Fixing).
When a loan event action is executed on the drawdown for the mirror parent, the same action is
mirrored on the child drawdown and vice versa.
Note that when a loan event is executed, only a limited number of fields in the action dialog can be
updated.

Note: It is important that any loan events enabled on a mirrored drawdown are not

facility-specific: it must be possible to apply the loan event to both sides of the mirror: see
Chapter 5 Managing loan events on page 69 for more information.

4.3.2.3 Rejecting mirrored drawdowns
When the drawdowns under the mirror facilities reach a certain state in the flow, you can no longer
modify data or move them back in the process flow: they can only be rejected.
Only an administrator possessing the appropriate permissions can cancel them and remove them
definitively from the system.

Chapter 5

Managing loan events

Facilities and drawdowns can be long term, and CLM helps control and manage events that may
occur during the life-time of the loan contract.
The events managed in the system include such events as the following: the ability to add a variety
of fees (such as commitment, late penalty, or cancellation fees); early repayment of the debt, either
fully or partially; amendments to the drawdown (for example, change in currency, interest rate
type, borrower, or loan structure); automatic pricing of the drawdown; automatic or manual fixing
of rates; and re-classification, or even a total write-off, of the remaining debt.

5.1 Setting up loan events
Action rules are used to manage these loan events. They determine the conditions under which an
action can be undertaken by the user and the resulting outcome upon invoking the action.
Action rule types can be used to set up event sub-types and to link specific instrument groups to an
event type.
Some action rules are used together with features, applied to an instrument definition, to allow you
to carry out the corresponding action.
You can define more than one rule for the same event and you can set up a hierarchy of action rules
where each type of action rule is defined individually with a priority. The priority defines the order in
which the rule matching is done. It is also possible to prevent an action, by setting up a disabling
action rule.
To set up loan events, the following steps are required:
1. Create the action rule types and action rules to determine the conditions under which the action
can be undertaken, and the outcome resulting from the action.

–

Action rule types are defined in Action Rule Type Editor: see 5.1.1 Action rule types on page
70

–

Action rules are defined in Action Rule Editor: see 5.1.2 Action rules on page 72.

2. Add the necessary features to the commercial lending instruments.
When a feature is attached to the instrument, the corresponding action event is enabled on
transactions using that instrument.

–

See 5.1.3 Enabling loan events on transactions on page 75.

Note: For information about carrying out loan events on drawdown transactions: see 5.2
Processing loan event actions on page 75.

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5 Managing loan events
5.1 Setting up loan events

5.1.1 Action rule types
In Action Rule Type Editor, it is possible to set up event sub-types and to link specific instrument
groups to an event type.
To define an action rule type:
1. In Action Rule Type Editor, enter the main attributes in the upper part of the editor.
Information
Event Type

Description
(Information only)
Type of loan event. These are predefined in CLM and listed on the left side of the
editor: see 5.1.1.1 Types of loan events on page 71.

Instrument Class

(Information only)
When you need to define an instrument for the selected Event Type, this field specifies
the instrument class on which you need to base the instrument definition.
For example, the COMMERCIAL-LOAN instrument class is used to set up Commitment
Fee and Late Payment Penalty instruments, whereas the CASH instrument class is
used to set up Funding Call instruments.

Hidden in
Action Rule Editor

Switch on Hidden in Action Rule Editor and/or Hidden in Mandate/Facility Editor to hide the
selected event type in the corresponding editor or editors.

Hidden in
Mandate/Facility
Editor
Need Instrument
Groups

Switch on to link specific instrument groups to an event type. The instrument group
can be selected in the Instrument Groups page of the Mandate Editor and in the
Instrument page of the Facility Editor.

Credit Linked
Default

Switch on to automatically set the Credit Linked switch in the Instrument page of the
Facility (Facility Editor). For example, for drawdowns, this switch must be on in order
for drawdowns to be set as credit linked at the facility level. See 2.9.2.7 Defining
instrument and event details on page 30.

2. Save the action rule type definition using File - Save As New.
3. In Action Rule Type Editor’s Action Rule Subtype page, enter the event subtype you want to add to
the Event Type.
4. In Action Rule Type Editor’s Instrument Groups page, specify the Instrument Group that you want to
link to the Event Type.

Note: The following Event Types need to have at least one Instrument Group attached to them in
order to link instrument groups to facility instruments:

•

Commitment Fee

•

Facility Fee

•

Drawdown

•

Funding Call

•

Drawdown Fee

•

Guarantee Call

•

Equity

•

Guarantee Refund

•

Facility Collateral

•

Late Payment Penalty

5. Save the whole action rule type definition using File - Save.

5 Managing loan events
5.1 Setting up loan events

5.1.1.1 Types of loan events
The following event types are available:
Event type

Description

Commitment Fee

The borrower may agree to pay the lender a recurring fee against the facility provided
by the lender.
This action enables the user to register the Commitment Fee transactions.
See 5.2.1 Commitment fees on page 76.

Conditional
Remuneration

In some cases, the borrower and lender may agree to exchange an ad-hoc sum of
money as governed by the terms of the facility.
This action enables the user to maintain a record of this exchange as a separate
transaction related to a specific drawdown.
See 5.2.2 Conditional remunerations on page 78.

Deferment
Commission

If the borrower wishes to defer the value date of the drawdown, the lender may wish
to charge a deferment commission upon the agreed drawdown amount.
This action helps the user to create a Deferment Commission transaction, which is
used to calculate such penalties as required.
See 5.2.3 Deferment commission on page 79.

Drawdown

This is the initial action of entering a Drawdown transaction.

Drawdown
Amendment

The borrower and lender may agree to change the terms and conditions of a
drawdown during it’s active life.
This action allows the user to amend some attributes of the drawdown, such as,
instrument, borrower, currency, transaction template, and so on.
See 5.2.4 Drawdown amendment on page 79.

Drawdown
Cancellation

The lender may wish to charge a penalty to the borrower when the borrower cancels a
drawdown after requesting it, but before the actual disbursal of cash.
This action allows the user to capture a penalty transaction for cancellation of the
drawdown.

Drawdown
Classification

If the borrower’s ability to repay the interest and principal starts to deteriorate, the
lender may be forced to classify the outstanding amounts against the borrower as
doubtful assets.
The Classification action allows the Lender Organization to classify deteriorating loans
as doubtful assets, or to reclassify doubtful assets as recovered assets.
See 5.2.5 Drawdown classification on page 87.

Drawdown Fee

This action allows the user to attach fees to a specific drawdown.

Drawdown
Rescheduling

The borrower and lender may agree to reschedule the value date of a drawdown to
one or more future date(s)
The Drawdown Rescheduling action allows the user to perform such rescheduling.

Due Amount Carry
Forward

When the borrower is not able to repay either the interest or principal (or both) upon
a scheduled payment date, the lender may agree to shift the payment date to a future
date, with or without any penalties.
The Due Amount Carry Forward action allows the user to undertake such rescheduling
of the cashflows.
See 5.2.6 Due amount carry forward on page 88.

Equity

The Risk Venture Capital action controls the possibility of equity-related drawdowns:
to invest (or divest) in equity holdings through the facilities framework.
See Chapter 6 Managing equity on page 103.

Facility Collateral

This action is used for creating a Collateral transaction in Drawdown Action Admin
which covers the whole Facility.

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5 Managing loan events
5.1 Setting up loan events

Event type

Description

Facility Fee

This action allows a user to create Facility Fee transactions that calculate the fees that
can be charged against a facility.
The fees can be interest-like regularly accruing fees, or they can be a one time lump
sum payment.
See 5.2.7 Facility fees on page 89.

Funding Call

This action is used when an organization is lending on behalf of a single third-party.
After the drawdown has been entered in the system, the user can issue a funding call
to this third-party.

Guarantee Call

The Guarantee Call records the demands from a lender to the user organization, when
the borrower has defaulted on a loan where the user organization stood as Guarantor.
(This is a Guarantee Call on an Issued Guarantee).

Guarantee Refund

This action allows the user to enter a drawdown against the defaulting borrower,
against whom they had stood as Guarantor.

Late Payment Penalty

When the borrower fails to repay the due amounts on the specific payment dates, the
system creates a set of Late Payment Penalty transactions using an activity (CLM Late
Payment Penalty).
These Late Payment Penalty transactions then keep calculating the penalty interest on
overdue amounts.

Late Payment Penalty
Realize

When the borrower repays the overdue amounts, and these amounts are allocated via
the Payment Allocation process, the system closes the Late Payment Penalty
transactions (either partially or fully, depending upon the extent of payment received)
and realizes the Late Payment Penalties.
The realization is undertaken via an activity (CLM Late Payment Penalty Realize).

Prepayment

The borrower and lender may wish to bring forward the principal repayment date,
either for the full amount of the principal or a partial amount.
The Prepayment action allows the user to record such foreclosures, along with the
possibility of calculating and recording any penalty fees or interest due from the
borrower.
See 5.2.8 Prepayments on page 91.

Rate Condition

This action allows the user to price fixed-rate loans using the zero-coupon method. It
also allows the defaulting of data used in calculating floating rates, including yield
curves, spreads and expressions.
See 5.2.10 Loan pricing on page 98.

Rate Renewal

This action allows the user to fix (that is, to set) the rates for floating-rate loans.
The rate fixing can be achieved either manually, one cashflow at a time, or using an
activity (CLM Drawdown Fixing).

Rate Revision

This action allows the user to revise the interest rate on a revisable rate loan.

Write Off

If the borrower is considered to be incapable of repaying the debt, then the lender
can use this action to write-off the outstanding debt, either fully or partially.
See 5.2.11 Write off on page 99.

5.1.2 Action rules
All action rules are composed of two parts: the rules to determine the conditions under which the
action can be undertaken, and then the outcome that results from the action.
In the upper part of Action Rule Editor, you define the conditions (the "if" part of the action rule), for
example, loan attributes and values, facility attributes and values, and the period within which the
action rule is active.

5 Managing loan events
5.1 Setting up loan events

When you start to action an event on a loan, the loan attributes’ values are matched against the
condition of the action rule. A rule is selected if the values of the specified attributes match those of
an action rule (either an exact match or where the values are null in the action rule).
CLM selects one or more rules to process the event as follows:

•

If only one matching action rule is found, it is used by default

•

If multiple matching action rules are found, the system uses the one defined with the highest
priority.

In the lower part of Action Rule Editor, you define the action (the "then" part of the rule), that is, the
outcome of the event.
When a loan event is executed, and the system is able to match an action rule with an event, CLM
processes the "then" part of the enabling action rule as follows:

•

If the values are defined in the action rule, these are used by default and cannot be modified

•

If the values are not defined in the action rule (that is, the values are null), the values must be
entered on execution of the event.

Note: If an action rule is required but has not been set up for a loan event, or it has not been set
up correctly, the system will not allow the event to take place and will terminate the
action.

5.1.2.1 Setting up action rule conditions
To set up the conditions of an action rule:
1. In Action Rule Editor, enter the main attributes of the action rule in the upper part of the editor.
These are the "if" conditions that define the action rule.
Information

Description

Unique numerical ID generated automatically by the system.

Disallow

Switch on to set up a disabling action rule.
If this switch is on, the action is prevented from taking place whenever the action rule
is selected by the system.

Save as New

Switch on to create a new action rule by copying the existing one.

Event Type

List of event types: see 5.1.1.1 Types of loan events on page 71.

Event Sub Type

List of event sub-types relevant for the selected Event Type.

Entity

Entity to which the action rule applies. Choose from: Approval, Facility, Mandate, or
Tranche.

Entity ID

Unique ID of the selected Entity.

Signature Date
From

These dates are compared to the signature date defined for the facility when
transactions belonging to the facility are being assessed against this action rule.

Signature Date To

If the facility’s signature date values do not correspond to the dates defined for the
rule, then the event cannot take place.

Priority

Number defining the priority of the action rule: the lowest number has the highest
priority.
As a rule, you should give a high number (hence, low priority) to more global
conditions (that are not linked to specific entities, attributes, or values); and give a
low number (hence, high priority) to more specific conditions (those defined with
more detailed attributes and values).

Event Client

Counterparty or Owner.
This indicates whether the counterparty or the transaction owner has initiated the
request for the action.

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5 Managing loan events
5.1 Setting up loan events

Information

Description

Event Date
Method

Method used to determine the value date of the transaction that results from the
action being performed. The most common methods would be: Any or Value Date.
Choose from:
•

Any - any date in the calendar on or after the Action Date

•

Non-Due-Date - any date that is not the value date of the parent transaction or
any of its cashflows

•

Payment Date - any date on or after the Action Date that coincides with one of the
payment dates of the transaction being processed (or any of its cashflows)

•

Revision Date - the next revision date of the parent transaction (only valid for
actions on revisable drawdowns)

•

Signature Date - the signature date of the facility of the transaction being
processed

•

Transaction Value Date - the value date of the parent transaction

•

Value Date - any date on or after the Action Date that coincides with the value
date of the transaction being processed (or any of its cashflows).

Note: Not all date methods are compatible with all event types: you must exercise
due care in selecting the correct method.
Key 1, 2, 3

Specific attributes of the transaction and their corresponding values.

Value 1, 2, 3

You can select Key 1 only, Key 1 in conjunction with Key 2, or all three keys to define
the condition.
Note: If all keys are selected, then the conditions operate as "and" conditions.

Schedule Type

List of available schedule types.
The action works specifically if the selected schedule type is one of the schedules
attached to the transaction.

Schedule
Currency

List of available currencies.

Schedule Date
Basis

List of available date bases.

Action Date From

The action rule applies to all eligible actions which fall within the active period.

The action works specifically if the selected currency is the currency of the selected
schedule type.

Action Date To
Fee Rule

Used if a specific amount or percentage fee is to be generated when processing the
event.

2. Save the action rule definition using File - Save As New.

5.1.2.2 Defining the action rule actions
To set up the actions resulting from an action rule:
1. In the lower part of Action Rule Editor, enter the parameters to define the outcome of the event:
this is the "then" part of the action rule.
The parameters you need to define vary according to the Event Type you selected in the upper
part of the editor:

–

It is not mandatory to enter a value for each parameter

–

If you enter a value for a parameter, this is used as the default value at the Event/Action
level and cannot be changed

–

If you do not enter a value for a parameter, you can manually select or insert a value at the
Event/Action level.

See Appendix B Loan event parameters on page 159 for more information.

5 Managing loan events
5.2 Processing loan event actions

2. Save the action rule definition using File - Save.

5.1.3 Enabling loan events on transactions
Some actions or events only become available on transactions when a feature is present in the
instrument definition.
When you have defined the action rules for an event or action, you need to add the corresponding
feature to the instrument in Instrument Editor’s Features page: see Appendix A Features on page 149
and 2.5 Instruments on page 21 for more information.

Note: For information about setting up specific types of instruments used in commercial lending:
see the guide TRM Instruments: Processing and Calculations.

5.2 Processing loan event actions
Drawdown Manager, or one of the modes based on the Drawdown Manager application (for
example, the Drawdown Action mode) is designed specifically for processing loan events on
drawdown transactions.

Note: The Drawdown Manager mode in which a loan event is available depends on the

configuration of CLM for your organization: see the TRM System Administration Guide for
more information.

To process a loan event on a drawdown transaction:
1. Launch the loan event in Drawdown Manager by doing one of the following:

–

Select the corresponding command from the menu (for example, New - Commitment Fee)

–

Right-click an existing drawdown transaction and select the action you want (for example,
Write-Off ).
Note that the drawdown transaction must have reached the final state, and it must not have
any outstanding loan events against it that are still in a provisional state (that is, they have
not yet reached the final state).

2. In the resulting event dialog, enter the main attributes of the event.
These parameters correspond to the action rule’s "if" conditions that are used to find a matching
rule that will then define the outcome of the event (the "then" part of the action rule).
The parameters in each dialog vary according to the action or command you are performing, but
many are common to all event types: see 5.1.2.1 Setting up action rule conditions on page 73.
3. Click Next to enable the action rule: the system searches for a matching event.
4. In the resulting event dialog, enter the remaining values using the information in the following
sections and in Appendix B Loan event parameters on page 159.
Note that some of the values are automatically filled, either using the values you specified in the
first dialog, or using the parameters defined in the matching event condition. These values are
displayed for information purposes only and cannot be modified: see 5.1.2.2 Defining the action
rule actions on page 74.
5. Click Finish to generate the corresponding loan event and transaction, if relevant.

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5 Managing loan events
5.2 Processing loan event actions

6. Save and process any resulting transactions using one of the menu items from the Command
menu.
New loan event transactions are generated with the following attributes:

–

Drawdown Number = Transaction Number of the original drawdown

–

State = DDA Open

See 4.2.2 Approving drawdown transactions on page 64.

5.2.1 Commitment fees
When a borrower and a lender sign a contract (a facility), the borrower may agree to pay a
commitment fee to the lender. This fee can be calculated based on the following:

•

Total credit sanctioned by the lender

•

Total used credit

•

Total unused credit.

5.2.1.1 Setup
Before the Commitment Fee transaction can be entered, you need to set up the following:

•

The Commitment Fee instrument must be defined and assigned with the Edit Commitment Fee
feature: see A.2.21 Edit Commitment Fee on page 155

•

The action rule for the Commitment Fee event must be set up correctly: see B.1 Commitment
Fee on page 159

5.2.1.2 Execution
In the initial Commitment Fee dialog, enter the following values and then click Next:
Information

Description

Action Date

Date of the event. By default, this is today’s date but it can be modified.

Event Date Method

Method used to determine the Event Date. Any or Signature Date ('Any' can be any day
on or after the Facility Signature Date.

Facility

ID of the facility.

Tranche

ID of the tranche.

In the second Commitment Fee dialog, the following information is required:
Information

Description

Action Date

Default to the values defined in the initial Commitment Fee dialog.

Event Date Method
Facility
Tranche
Event Condition ID

ID of the matching action rule/event condition.
If any of the parameters used to determine the outcome of the event have been
defined in the matching event/action, these are used by default and cannot be
modified.
See B.1 Commitment Fee on page 159 for more information.

Location

You must enter a location if it is to be used with the Technical Delay associated with
the Country Group.

5 Managing loan events
5.2 Processing loan event actions

Information

Description

Commitment
Counterparty

Counterparty to be used for the Commitment Fee transaction.

Opening Date

Opening date of the Commitment Fee transaction.

Commitment Value
Date

Value date of the Commitment Fee transaction.
•

If Event Date Method = Signature Date, then this is automatically set to the
signature date of the facility being processed.

•

If Event Date Method = Any, you can enter any date on or after the Opening Date.

Commitment Maturity
Date

By default, this is the Active To Date of the facility, but it can be changed to any date
after the Commitment Value Date.

Commitment Type

Defines the basis for the calculation of a Commitment Fee transaction on one of the
following: Total Credit, Unutilized Credit, or Utilized Credit.

Commitment Amount

Amount of the Commitment Fee transaction.
This amount is automatically calculated based on the facility or facility/tranche
combination, the Commitment Value Date, and the Commitment Type.

Commitment Portfolio

Portfolio to be used for the Commitment Fee transaction.

Commitment
Instrument

Instrument to be used for the Commitment Fee transaction.

Commitment Template

Transaction template to be used for the Commitment Fee transaction.

5.2.1.3 Generated data
•

Transaction
The following new transaction is generated:

–

A Commitment Fee transaction with its own schedule structure (based upon the transaction
template) and cashflows.

5.2.1.4 Updating commitment fees
Commitment fee transactions are updated in real time when amount entities (i.e. drawdowns and
amount events) are in a Final state. Commitment fee transactions are constantly updated to ensure
that the base amount used to calculate the amount of the commitment fee is correct. The following
events can have an effect on the base amount:
Commitment Type
Event

Credit Amendment: any changes to the Credit Amount (credit increase,
cancellation or transfer)

Total
credit

Total
used
credit

Yes

Total
unused
credit
Yes

A Drawdown

Yes

Drawdown Prepayment/Amortization (in a revolving context only)

Yes

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5 Managing loan events
5.2 Processing loan event actions

When you set an amount event or a drawdown to the Final state, a new schedule with corresponding
cashflows is created. The following two fields, that can be added to the Schedule view, explain which
entity has caused the change in the commitment fee transaction:
Information

Description

Causing Entity

For information only. The entity that has caused the change in the commitment
fee transaction. Values are: Drawdown, Equity, AmountEvent, or AmountEntity.

Causing Entity ID

The ID of the entity:
•

For Drawdown and Equity it is the transaction number

•

For AmountEvent it is the ID of an amount event

•

For AmountEntity it is the ID of an amount entity

Note: When you reject an amount event or drawdown, schedules and corresponding cashflows
are removed.

5.2.2 Conditional remunerations
A Conditional Remuneration is the loan event that is created when the lender and borrower agree to
an exchange of funds that is not explicitly envisaged in the drawdown. However, the ad-hoc
inflows/outflows are permitted for the facility under which the drawdown is being entered. The
additional inflow of funds can arise from several factors such as:

•

Receipt of dividends, when the drawdown is made as an equity participation

•

Receipt of additional remuneration, by way of higher interest payout, for a conditional loan
drawdown

•

Fluctuations in exchange rates between the repayment currency and the credit currency of a
drawdown.

The Conditional Remuneration transaction simply adds extra cashflows to the original drawdown
transaction.

5.2.2.1 Setup
Before the Conditional Remuneration action can be performed on a drawdown, you need to set up
the following:

•

The instrument associated with the drawdown must be assigned with the feature Conditional
Remuneration: see A.2.9 Conditional Remuneration on page 151.

•

The action rule for the Conditional Remuneration event must be set up correctly: see B.2
Conditional Remuneration on page 159.

5.2.2.2 Execution
In the initial Conditional Remuneration dialog, enter the following values.
Information

Description

Action Date

Date of the event. By default, this is today’s date but it can be modified.

Event Subtype

Event subtype according to the source of the Conditional Remuneration cashflow, that
is, whether the cashflow comes from dividends, or adjustments in one of the
following: interest rates (IR); FX rates (FX); or the value of an index (IX).

Event Date Method

Method used to determine the Event Date.

5 Managing loan events
5.2 Processing loan event actions

In the second Conditional Remuneration dialog, the following information is required:
Information
Action Rule ID

Description
ID of the action rule used to match the event condition.
If any of the parameters used to determine the outcome of the event have been
defined in the matching event/action, these are used by default and cannot be
modified.
See B.2 Conditional Remuneration on page 159 for more information.

Action Date

Default to the values defined in the initial dialog.

Event Subtype
Event Date Method
Facility

Facility associated with the drawdown.

Borrower

Counterparty associated with the drawdown.

Tranche

Tranche associated with the facility of the drawdown.

Currency

Currency associated with the drawdown.

Drawdown

Drawdown Number.

Transaction Value Date

Next valid due date according to the selected Event Date Method. This can be changed to
any valid due date that is on or later than the Action Date.

Event Amount

Amount of the Conditional Remuneration transaction.

5.2.2.3 Generated data
•

Transaction
A new Conditional Remuneration transaction is generated

•

Cashflows
The Conditional Remuneration transaction has the following cashflow:

–

The transaction has one cashflow of the type specified in the loan event.

5.2.3 Deferment commission
If the borrower wishes to defer the value date of the drawdown, the lender may wish to charge a
deferment commission upon the agreed drawdown amount.
This action helps the user to create a Deferment Commission transaction, which is used to calculate
such penalties as required.

5.2.3.1 Setup
Before a Deferment Commission event can be performed on a drawdown transaction, you need to
set up the following:

•

The instrument associated with the drawdown must be assigned with the feature Deferment
Commission: see A.2.12 Deferment Commission (Setup) on page 152.

•

The action rule for the Deferment Commission event must be set up correctly: see B.3
Deferment Commission on page 160.

5.2.4 Drawdown amendment
The Drawdown Amendment event is modeled as a transaction with schedules and cashflows.
Drawdown Amendment events are normally created and managed in a specially configured mode
(for example, the Admin mode) of Drawdown Manager.

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5 Managing loan events
5.2 Processing loan event actions

A Drawdown Amendment event partly or fully closes the cashflows outstanding in the original
drawdown transaction as at the Amendment Date, and then a new transaction is created from the
Amendment Date onwards. There is no settlement of Principal for this type of event.
The new Drawdown Amendment transaction maintains some attributes of the original transaction,
as well as a series of additional attributes specific to the Drawdown Amendment event.
Some of these new attributes are inherited from and validated against the facility/tranche definition
of the drawdown being amended. Other attributes are entered manually for each Drawdown
Amendment event or matched against an event condition.

Note: It is also possible to amend a limited number of attributes of all drawdown transactions

under a facility/tranche combination simultaneously using an activity: see C.1 CLM Bulk
Drawdown Amendment on page 169.

5.2.4.1 Setup
Before a Drawdown Amendment event can be performed on a drawdown transaction, you need to
set up the following:

•

The instrument associated with the drawdown must be assigned with the feature
Drawdown-Amendment: see A.2.13 Drawdown Amendment on page 152.

•

The action rule for the Drawdown Amendment event must be set up correctly: see B.4
Drawdown Amendment on page 160.

•

If Event Type = Transaction Condition Conversion, and you want to amend one or more attributes
for all drawdown transactions under a facility/tranche, you need to set up the CLM Bulk
Drawdown Amendment activity: see C.1 CLM Bulk Drawdown Amendment on page 169.

5.2.4.2 Execution
The procedure to perform a Drawdown Amendment event on a drawdown transaction is the same
for all Drawdown Amendment event types.
In the initial Amendment dialog, enter the following values.
Information

Description

Action Date

Date when the event takes place. By default, this is today’s date but it can be
changed.

Action Date is used as the Opening Date of the Drawdown Amendment transaction. This
may be the same as, or different from, the actual drawdown Amendment Date.
Event Client
Event Subtype

Event Date Method

Initiator of the amendment. Choose from: Owner or Counterparty.
Type of Drawdown Amendment event. Choose from:
•

Counterparty Conversion: see 5.2.4.2.1 Counterparty conversion on page 82.

•

Currency Conversion: see 5.2.4.2.2 Currency conversion on page 82.

•

Transaction Condition Conversion: see 5.2.4.2.3 Transaction condition conversion
on page 83.

•

Transaction Template Conversion: see 5.2.4.2.4 Transaction template conversion
on page 84.

•

Instrument Conversion: see 5.2.4.2.5 Instrument conversion on page 85.

•

General Amendment: see 5.2.4.2.6 General amendments on page 85.

Method used to determine the Event Date.

5 Managing loan events
5.2 Processing loan event actions

In the second Drawdown Amendment dialog, the following information is required:
Information

Description

Action Date

Default to the values defined in the initial dialog.

Event Client
Event Date Method
Event Condition ID

ID of the matching action rule / event condition.
If any of the parameters used to determine the outcome of the event have been
defined in the matching event /action, these are used by default and cannot be
modified.
See B.4 Drawdown Amendment on page 160 for more information.

Opening Date

By default, this is the Action Date, but it can be changed to any date on or before the

Amendment Date.

Allow Past Period
Amendment

If this switch is on, the transaction can be amended with retrospective effect
(Amendment Date is before the Action Date).

Payment Date Method

Method used to determine the payment date. The payment date can be on the
Amendment Date or the Next Due Date. If accrued interest is to be paid as a result of
the amendment, you must select one of the options.

Amendment Date

Effective date of the Drawdown Amendment event.
On this date, the original cashflow is fully or partially closed and the new one, with the
new characteristics, begins.
Amendment Date = Value Date of the drawdown amendment transaction
This can be on a scheduled due date (either the previous or the next) or on a non-due
date. Note, that in all cases the given Amendment Date is validated against the last
due date of the drawdown transaction before the Action Date as follows:

Payment Date

•

If Allow Past Period Amendment is off, the Amendment Date is not accepted by the
system.

•

If Allow Past Period Amendment is on, the Amendment Date is accepted and special
cashflows compensating for the past period cashflows between Amendment Date and
Action Date are created.

Date used for any payable amount as of the Amendment Date. It is calculated based
on the specified Amendment Date and Payment Date Method.
•

If Payment Date Method = Amendment Date: Payment Date = Amendment Date
and cannot be changed.

•

If Payment Date Method = Next Due Date: Payment Date = Until When Date (that
is, the due date) of the first cashflow in the drawdown where:
-

Until When Date is later than or equal to the Action Date, and

Until When Date is later than or equal to the Amendment Date, and

The value cannot be changed.

If a Drawdown Amendment event occurs on a non-due date it can be settled as
follows:

Partial Amount

•

On the Amendment Date

•

On the next scheduled due date following the Amendment Date

•

On the due date following the next scheduled due date (if the number of days
between the Amendment Date and the next scheduled due date is less than the
Minimum Payment Stub Length (Material Delay).

Determines whether the transaction can be partially amended.
Note: In case of a partial drawdown amendment, additional drawdown amendments
can still be created from the same drawdown up to the new Outstanding Amount
after the previous drawdown amendment.

Keep Guarantees

Determines whether the amendment transaction inherits the original transactions
guarantees.

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5.2 Processing loan event actions

Information

Description

Outstanding Amount

(Information only)
By default, this is the outstanding total amount of principal as of the Amendment Date
that can be amended by this event.
This amount takes into account any other amendments that have previously taken
place and affected the total principal amount.

Amendment Amount

Remaining Amount

By default, Amendment Amount = Outstanding Amount.
•

If the Partial Amount is off, Amendment Amount is frozen and cannot be changed.

•

If the Partial Amount is on, Amendment Amount can be changed to any amount that is
less than the Outstanding Amount.

(Information only)
Remaining total of principal repayments of the drawdown as of the Amendment Date
following this amendment, calculated as:
Remaining Amount = Outstanding Amount – Amendment Amount

For the remaining values for each Drawdown Amendment event type, see the following sections.

5.2.4.2.1 Counterparty conversion
Counterparty Conversion event allows you to change the current counterparty of the drawdown
transaction to any other eligible counterparty defined in the drawdown’s facility/tranche setup, but
does not allow any other changes to be made in the transaction.
Information

Description

Counterparty
Conversion

Type of drawdown amendment according to the specified Event Subtype.

Current Counterparty

ID of the counterparty on the drawdown on the Amendment Date.

Target Counterparty

ID of the new counterparty.
Only valid counterparties for the facility/tranche of the drawdown are accepted by the
system. If the amendment is made against a completely new counterparty, that is not
identified in the facility, the facility must be amended and processed before the
amendment on the drawdown can be made.

The Drawdown Amendment transaction carries all the attributes of the original transaction except
for the following: Counterparty and Value Date.
See also 5.2.4.3 Generated data on page 86.

5.2.4.2.2 Currency conversion
Currency Conversion event allows you to change the current currency of the transaction to any
other eligible currency defined in the drawdown’s facility/tranche setup, but does not allow any
other changes to be made in the transaction.
Information

Description

Currency Conversion

Type of drawdown amendment according to the specified Event Subtype

Current Currency

ID of the currency of the drawdown on the Amendment Date.

Target Currency

ID of the new currency.
Only valid currencies for the facility/tranche of the drawdown are accepted by the
system. If the amendment is made against a completely new currency, that is not
identified in the facility, the facility must be amended and processed before the
amendment on the drawdown can be made.

5 Managing loan events
5.2 Processing loan event actions

Information

Description

Reference FX Date

By default, this is the Reference FX Date on the Opening Date of the event, but it can
be modified to any date before the Amendment Date.

Reference FX Scenario

Scenario to be used to fetch the rates.

Reference FX Rate

FX rate for the current/target currency pair on the Reference FX Date in the given
Reference FX Scenario.
This rate is used to give a default value for the Amend FX Rate as well as to assess the
reasonability of the Amend FX Rate, if manually modified.

Amend FX Rate

By default, this is the Reference FX Rate, but it can be modified.

Target Amount

Target Amount = Amendment Amount * Amend FX Rate

The Drawdown Amendment transaction carries all the attributes of the original transaction with the
following exceptions: Currency and Value Date.
The cashflows of the new transaction are created in the Target Currency, and based on the Nominal
Amount (that is, the Target Amount), of the Drawdown Amendment transaction.
See also 5.2.4.3 Generated data on page 86.

5.2.4.2.3 Transaction condition conversion
Transaction Condition Conversion event allows you to change any transaction and schedule data
that is modifiable in the current transaction template of the drawdown transaction, but does not
allow any other changes to be made in the transaction.
This event may be used when the rates that were initially agreed for the transaction are changed by
agreement (Rate Renegotiation). It may also be used, for example, for restructuring of loan
repayments, if changes to a repayment schedule are agreed on between parties and allowed under
the current transaction template of the transaction.
With the Transaction Condition Conversion event, it is also possible to create some amendments in
bulk, that is, to amend certain attributes of all drawdown transactions under a particular
facility/tranche simultaneously.

•

To do so, use the CLM Bulk Drawdown Amendment activity: see C.1 CLM Bulk Drawdown
Amendment on page 169 for details of the activity’s parameters.
The activity applies the amendments to all drawdown transactions in the specified
facility/tranche combination and generates the subsequent Drawdown Amendment transactions
accordingly.
The activity can be used to amend the drawdowns’ fixing rate, fixing period, and spread values.

Note: Activities are set up and managed in Activity Manager: see the TRM User Guide for more
information.

Information
Breakage Cost Method

Description
Method used to calculate the breakage cost. Choose from:
•

Net Amount – Breakage cost is entered manually as a fixed amount.

•

Indemnity Interest – Breakage cost is calculated in a similar manner as a
Prepayment Indemnity in a Prepayment.

•

Valuation

•

None – No breakage cost is created.

For example, there may be some costs if the spread is reduced.

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Information

Description

Breakage Cost Amount

Amount of the Breakage Cost cashflow.

Breakage Rate

Discount Rate

•

If Breakage Cost Method = None or Indemnity Interest, this field is empty and
cannot be modified.

•

If Breakage Cost Method = Net Amount, enter an amount in the field.

Interest rate used to calculate the future value Breakage Cost Amount.
•

If Breakage Cost Method = None or Net Amount, this field is empty and cannot be
modified.

•

If Breakage Cost Method = Indemnity Interest, enter the interest rate used to
calculate the Breakage Cost Amount (as in a prepayment indemnity calculation).

Interest rate used in discounting the future value Breakage Cost Amount to the
Amendment Date.
•

If Breakage Cost Method = None or Net Amount, this field is empty and cannot be
modified.

•

If Breakage Cost Method = Indemnity Interest, enter the interest rate used to
discount the Breakage Cost Amount from the Value Date to the Amendment Date
(as in a prepayment indemnity calculation).

A Drawdown Amendment transaction carries all the attributes of the original transaction except for
the following:

•

In a Rate Component Renegotiation event, the modified data would be the rate(s) of one or
several interest schedules present in the transaction

•

In a Loan Restructuring event, the modified data would be the amortization schedule attributes
affecting calculation of amortization amounts as well as setting the amortization dates in the
transaction.

The new transaction (or its schedules) can be modified as long as the current transaction template
and the facility/tranche setup allow it.
If the current transaction template does not allow the changes necessary to accomplish the
amendment, the Transaction Condition Conversion event cannot be used for the purpose. Instead, a
Transaction Template Conversion event must be created after a new transaction template has been
set up in such a manner that the new transaction reflects the preferred outcome of the amendment.
The cashflows of the new transactions are created according to the attributes given in the Drawdown
Amendment transaction, as in a new drawdown.
See also 5.2.4.3 Generated data on page 86.

5.2.4.2.4 Transaction template conversion
Transaction Template Conversion event allows you to add a completely new transaction template to
the drawdown.
Information

Description

Current Instrument

Instrument of the drawdown transaction.

Current Transaction
Template

Transaction template of the drawdown transaction.

Target Transaction
Template

One of the eligible transaction templates for the current instrument as defined in the
facility/tranche setup.
Only valid transaction templates for the facility/tranche of the drawdown are accepted
by the system. If the amendment is made against a completely new transaction
template, that is not identified in the facility, the facility must be amended and
processed before the amendment on the drawdown can be made.

5 Managing loan events
5.2 Processing loan event actions

The Drawdown Amendment transaction carries all the attributes of the original transaction except
for the following: Transaction Template.
See also 5.2.4.3 Generated data on page 86.

5.2.4.2.5 Instrument conversion
Instrument Conversion event allows you to change the current instrument of the drawdown
transaction to any other valid instrument of the same class defined for the facility/tranche setup of
the drawdown and a new transaction template for the Drawdown Amendment transaction.
It is also possible to modify any of the transaction or schedule data that is allowed to be modified by
the new transaction template.
Information

Description

Current Instrument

Instrument of the drawdown transaction.

Target Instrument

One of the eligible instruments as defined in the facility/tranche setup.
Only valid instruments for the facility/tranche of the drawdown are accepted by the
system. If the amendment is made against a completely new instrument, that is not
identified in the facility, the facility must be amended and processed before the
amendment on the drawdown can be made.

Target Transaction
Template

The Drawdown Amendment transaction carries the same attributes as those described in 5.2.4.2.3
Transaction condition conversion on page 83.
See also 5.2.4.3 Generated data on page 86.

5.2.4.2.6 General amendments
General Amendment event allows you to do all of the previously described amendment events in
one single amendment event.
Information

Description

Current Counterparty

Counterparty of the drawdown transaction on the Amendment Date.

Target Counterparty

New counterparty for the Drawdown Amendment transaction.

Current Instrument

Instrument of the drawdown transaction on the Amendment Date.

Target Instrument

New instrument for the Drawdown Amendment transaction.

Current Transaction
Template

Transaction template of the drawdown transaction on the Amendment Date.

Target Transaction
Template

New transaction template for the Drawdown Amendment transaction.

Current Currency

Currency of the drawdown transaction on the Amendment Date.

Target Currency

New currency for the Drawdown Amendment transaction.

Reference FX Date

Date as of which the Reference FX Rate (see below) is identified by the system.
•

If Current Currency = Target Currency, this field cannot be modified.

•

Otherwise, Reference FX Date = Opening Date of the event, but this can be
modified to any date before the Amendment Date.

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5 Managing loan events
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Information

Description

Reference FX Scenario

Scenario to be used to fetch the rates.
•

Reference FX Rate

If Current Currency = Target Currency, or if the scenario is specified in the event
condition, this field cannot be modified.

FX rate for the current/target currency pair on the Reference FX Date in the given
Reference FX Scenario.
•

If Current Currency = Target Currency, this field cannot be modified

Amend FX Rate

Actual FX rate used to convert the Amendment Amount into the Nominal Amount of
the new transaction.

Target Amount

Amount in the Target Currency used as the Nominal Amount of the Amendment
transaction.

The Drawdown Amendment transaction has the same generic characteristics as those described
previously.

5.2.4.3 Generated data
•

Transaction
A Drawdown Amendment event generates a new transaction with the following attributes:

–

Reference Number = Transaction Number of the initial drawdown transaction.
This is used to maintain a reference between the Drawdown Amendment event transaction
and the initial drawdown.

–

Continuation Number = Continuation Number of the drawdown.
This is used to keep a reference from the Drawdown Amendment event to the drawdown
being amended (if the original drawdown has been previously amended.

The transaction’s remaining attributes are inherited either from the drawdown, or those
specified for the Drawdown Amendment event.

Note: If the Keep Guarantees switch was not activated in the Amendment dialog, you must now
attach new guarantees to the created transactions, if new guarantees are needed.

•

Cashflows
The transaction is generated with the following cashflows:

–

Cashflows (Principal and Interest) closing fully or partially the cashflows in the underlying
drawdown, including a not payable (but bookable) settlement cashflow for the Amendment
Amount, where Value Date = Amendment Date.

–

Cashflows (Principal and Interest) for the new amended drawdown, including a not payable
(but bookable) settlement cashflow for the Amendment Amount, where Value Date =
Amendment Date.

–

Accrued Interest flows (if the drawdown’s Amendment Date is not an interest due date) on
the drawdown’s Amendment Date (and with the Payment Date set according to the Payment
Date of the Drawdown Amendment event).

–

Adjustment cashflows inside the period between the Amendment Date and