Banking Back-Office Processing

Transcription

1 Banking Back-Office Processing Commercial Loans Administration Guide Copyright 2001, Unisys Corporation. All rights reserved Unisys is a trademark of Unisys Corporation Release June 2004 Printed in the UK

2 The names, places, and/or events used in this publication are not intended to correspond to any individual, group, or association existing, living or otherwise. Any similarity or likeness of the names, places and/or events with the names of any individual, living or otherwise, or that of any group or association is purely coincidental and unintentional. NO WARRANTIES OF ANY NATURE ARE EXTENDED BY THIS DOCUMENT. Any product and related material disclosed herein are only furnished pursuant and subject to the terms and conditions of a duly executed Program Product License or Agreement to purchase or lease equipment. The only warranties made by Unisys, if any, with respect to the products described in this document are set forth in such License or Agreement. Unisys cannot accept any financial or other responsibility that may be the result of your use of the information in this document or software material, including direct, indirect, special or consequential damages. You should be very careful to ensure that the use of this information and/or software material complies with the laws, rules, and regulations of the jurisdictions with respect to which it is used. The information contained herein is subject to change without notice. Revisions may be issued to advise of such changes and/or additions. Correspondence regarding this publication should be forwarded to Unisys Corporation, Bakers Court, Bakers Road, Uxbridge, Middlesex, UB8 1RG, United Kingdom. All registered trademarks are acknowledged.

3 About This Guide This guide describes the Commercial Loan functions offered by the Unisys Banking Back-Office Processing product. The information contained in this guide is also available as online help. Note: This guide does not describe the functions of the Loans Administration module. For details of this module, see the Loans Administration System Guide. Scope This guide describes the Commercial Loans module and associated data entry screens. Examples of the screens are shown and instructions on their use are given. Audience This guide is intended for personnel preparing information for, and entering data associated with, Commercial Loans deals. Prerequisites Any person using this guide should be familiar with the user documentation and understand the banking terminology associated with Commercial Loans. Users of this guide should have read the Starter s Guide that provides instruction in the use of the screens. How to Use This Guide This guide should be used as a reference tool when preparing information for data entry. Use the guide in conjunction with a copy of your Guide to Setting Up and the Core Functions and Inquiries Guide. Refer to the On-Demand Reports Guide for instructions on how to select and run reports iii

4 About This Guide About Urbis The usage of the product name Urbis is due to be phased out as part of the Unisys re-branding exercise. The replacement will be the generic term "Banking Back-Office Processing" solution or "Banking Back-Office" for short. To provide continuity with existing product documentation, the name Urbis is used within this document, but is synonymous with Banking Back-Office Processing. Organisation This guide consists of three sections and one appendix. Section 1. Introduction This section provides an introduction to the Commercial Loans module; it briefly describes the types of Commercial Loan that can be processed. Section 2. Commercial Loans Screens This section describes the data entry screens associated with the Commercial Loans module. A short description covering data entry, is supplied with each screen. The description is accompanied by an illustration of the screen. Section 3. Definition of Field Names This section provides definitions of the field names on the Commercial Loans data entry screens. The fields are listed alphabetically and details of valid entries are given. Appendix A. Commercial Loans Calculations The appendix provides the formulas used by the system for calculations associated with the processing of Commercial Loans transactions. iv

5 About This Guide Related Product Information Product Overview ( ) This document describes the capabilities and benefits of the modules of the Banking Back-Office Processing system. It consists of an overview of the system, and a description of each of the modules and interfaces available. It is intended for use by senior management. Operations Reference Card ( ) This document is a single card that provides a list of screen names and their mnemonics. The list is organised according to the menu structure of the Graphical User Interface. The card also describes how to log on and off the system, enter data, make inquiries and print reports. These instructions are relevant to the Graphical User Interface only. Starter s Guide ( ) This guide describes how to enter data and make online inquiries. It also includes a description and example of commonly used data entry and inquiry screens. This guide is intended for all new and inexperienced personnel who need to enter data and make inquiries. Guide to Setting Up ( ) This guide describes how to set up parameters that govern the operating environment of the system. It describes the procedures for setting up the business and operational tables, and setting up usercodes and access security. The procedures for setting up blueprint parameters are provided with a description of each parameter. It should be used by all persons involved in installation, implementation and maintenance of these system parameters. Core Functions and Inquiries Guide ( ) This guide describes the kernel functions that are used regularly for the maintenance of information utilised by a number of modules. It describes the procedures for setting up and maintaining data, such as market rates and dealers. It also describes inquiries that are common to all contracts. This guide is relevant to all users. Clients and Accounts Administration Guide ( ) This guide describes the data entry and inquiry screens associated with setting up and maintaining client details. This guide also describes the set up and maintenance of client accounts, including automatic payments (standing orders). An appendix covers the calculations used by client accounts. This should be used by personnel preparing information for data entry v

6 About This Guide Settlements Guide ( ) This guide describes the processes associated with settlements and customer transfers. It details how to administer the settlement queues. This guide also describes how to use the Straight Through Processing and Netting functions. It should be used by personnel managing the settlements department. General Ledger Administration Guide ( ) This guide describes the data entry screens associated with General Ledger transactions. This should be used by personnel preparing information for data entry. Risk Management Administration Guide ( ) This guide describes the data entry screens associated with setting up limits and exposures. The guide also describes the screens associated with portfolios. The amounts that represent book and market values are listed by module in an appendix. This guide is intended for personnel preparing information for data entry and those concerned with controlling risk. Foreign Exchange and Money Market Administration Guide ( ) This guide describes the data entry screens associated with Foreign Exchange and Money Market transactions. An appendix gives the calculations used in the processing of Foreign Exchange and Money Market transactions. This guide is intended for personnel preparing information for data entry. Forward Rate Agreements and Interest Rate Swaps Administration Guide ( ) This guide describes the data entry screens and some related inquiries associated with Forward Rate Agreement and Interest Rate Swaps transactions. An appendix gives the calculations used in the processing of Forward Rate Agreement and Interest Rate Swap transactions. This guide is intended for personnel preparing information for data entry. Futures Administration Guide ( ) This guide describes the data entry screens associated with Futures transactions and some related inquiries. An appendix gives the calculations used in the processing of Futures transactions. This guide is intended for personnel preparing information for data entry. Options Administration Guide ( ) This guide describes the data entry screens associated with Options transactions. An appendix gives the calculations used in the processing of Options transactions. This guide is intended for personnel preparing information for data entry. vi

7 About This Guide Securities Administration Guide ( ) This guide describes the data entry screens associated with Interest Bearing Securities, Discounted Securities and Repurchase Agreements transactions and some related inquiries. An appendix gives the calculations used in the processing of Securities transactions. This guide is intended for personnel preparing information for data entry. Trade Finance Administration Guide ( ) This guide describes the data entry screens used by the Trade Finance department. This guide is intended for personnel preparing information for data entry. Generalised Fees Administration Guide ( ) This guide describes the data entry screens associated with Fee transactions and supporting business table. This guide is intended for personnel preparing information for data entry. Core On-Demand Reports ( ) This guide describes how to run online reports that are provided in the core of the system and which will be relevant to most implementations of the system. Any options available when producing a report are detailed as well as any specific calculations. On-Demand Reports Guide ( ) This guide describes on-demand reports in alphabetical order. Any options available when producing a report are detailed as well as any specific calculations. Note: core reports are described in the Core On-Demand Reports Guide; retail reports are described in the Retail On- Demand Reports Guide. Overnight Reports ( ) This guide describes how to run offline reports. This includes an overview of overnight processing. Instructions on how to initiate reports are given. This guide should be used by all personnel who need to understand the reports and the overnight process. Data Dictionary ( ) This document provides details of data fields within every dataset on your banking systems database. This document should be used by staff preparing the accounting models and writing SQL reports to inquire on the database. Guide to Interfaces with External Systems ( ) This guide describes the running of all the interfaces between your Banking Back Office system and external systems. This guide is intended for personnel involved in setting up and running external interfaces vii

8 About This Guide Order Transport Management System ( ) This guide describes how to enter stock exchange securities contracts using the Order Transport and Management System. The screens in this guide allow users to add, maintain and inquire on deals, convert deals into stock exchange securities contracts, and liaise with brokers to complete settlement of a deal. This guide is intended for personnel preparing information for data entry. Portfolio Management ( ) This guide describes how to create portfolios for the clients and agents who will be trading stock exchange securities with your institution. A large array of inquiry screens for managing these portfolios is also described. This guide is intended for personnel preparing information for data entry. Stock Exchange and Securities Management ( ) This guide describes how to set up and maintain the securities master file, allowing you to record details of stock exchange securities. This guide also describes how to create, maintain and inquire on contracts based on stock exchange securities, including the necessary static data. Loan Administration System Guide ( ) This guide describes the data entry screens associated with Syndicated Loans. It includes entry of facilities, and contracts such as drawdowns, guarantees and acceptances and their schedules. The screens in this guide allow users to enter data using workflows. This guide is intended for personnel preparing information for data entry. Static Database Reports Guide ( ) This guide provides examples of the master data information used in the establishment and production of the static database. It should be used by persons who are familiarising themselves with the systems functionality. Static Database Transaction Input Guide ( ) This guide, in conjunction with the static database, enables users to evaluate the functions and features of many of the modules. It should be used by persons who are familiarising themselves with the systems functionality. viii

9 Contents Section 1 Introduction to Commercial Loans Commercial Loan Contract Types All Contracts Commitment Commitment Fees Fixed Rate Drawdown Base Rate Drawdown Discounted Drawdown Splitting or Combining Drawdowns Cost of Funds for Drawdowns Schedule Events Commitment Schedule Events Drawdown Schedule Events Interest Accrual After Drawdown Due Date Confirmations and Payment Advices Nostro and Agent Combinations Section 2 Commercial Loans Screens Introduction Creating a Commercial Loan Prerequisites Commercial Loans Defaults Maintenance (CLDFM) Commitment Contract Screens CL Commitment Add (CLCMA) CL Commitment Change (CLCMC) CL Commitment Inquire/Delete (CLCMI) Commitment Schedule Screens CL Commitment Schedule Add (CLCSA) CL Commitment Schedule Change (CLCSC) CL Commitment Schedule Inquire/Delete (CLCSI) Fixed Rate Drawdown Contract Screens CL Drawdown Add (CLDDA) CL Drawdown Change (CLDDC) CL Drawdown Inquire/Delete (CLDDI) Fixed Rate Drawdown Schedule Screens CL Drawdown Schedule Add (CLDSA) CL Drawdown Schedule Change (CLDSC) CL Drawdown Schedule Inquire/Delete (CLDSI) ix

10 Contents Base Rate Drawdown Contract Screens CL Base Rate Drawdown Add (CLBRA) CL Base Rate Drawdown Change (CLBRC) CL Base Rate Drawdown Inquire/Delete (CLBRI) Base Rate Drawdown Schedule Screens CL Base Rate Drawdown Schedule Add (CLDBA) CL Base Rate Drawdown Schedule Change (CLDBC) CL Base Rate Drawdown Schedule Inquire/Delete (CLDBI) Discounted Drawdown Contract Screens CL Discounted Drawdown Add (CLDLA) CL Discounted Drawdown Change (CLDLC) CL Discounted Drawdown Inquire/Delete (CLDLI) Contract Diary Narratives CL Loan Participants (CLPTC) CL Loan Register (CLLOM) Section 3 Definition of Field Names Introduction Appendix A Commercial Loans Calculations Introduction... A 1 Interest... A 1 Add-on... A 1 Profit Share... A 1 Commercial Loans Discounted Drawdowns... A 2 Interest Paid... A 2 Book Value... A 2 Yield Rate... A 2 Commercial Loans Commitments... A 2 Fee... A 2 Index... Index 1 x

11 Figures 2 1 Flow of Commercial Loan Creation Screens Commercial Loans Defaults Maintenance screen CL Commitment Add Screen CL Commitment Change Screen CL Commitment Schedule Add Screen CL Drawdown Add Screen CL Drawdown Change Screen CL Drawdown Schedule Add Screen CL Base Rate Drawdown Add Screen CL Base Rate Drawdown Change Screen CL Base Rate Drawdown Schedule Add Screen CL Discounted Drawdown Add Screen CL Discounted Drawdown Change Screen CL Loan Participants Screen CL Loan Register Screen xi

12 Figures xii

13 Tables 1 1 Diary Event Combinations Entries in Nostro and Agent Fields Definition of Field Names xiii

14 Tables xiv

15 Section 1 Introduction to Commercial Loans Commercial Loan Contract Types The Commercial Loans module processes the following types of contract: Commitment Fixed Rate Drawdown Base Rate Drawdown Discounted Drawdown A commitment is an agreement by a bank to make funds available. Drawdowns are contracts in which the client withdraws part of the available funds

16 Introduction All Contracts Each contract is linked to a General Ledger Master an Accounting Centre and Location Code. A default can be set up for the General Ledger Master, Accounting Centre and Location Code. The General Ledger Master determines the ledger category for the contract, see the General Ledger Administration Guide for further information on General Ledger Masters. The accounting centres are attached to a location as reporting for commercial loans is carried out at a location level. The location is set up on the Location Maintenance (LOCTM) screen, see the Guide to Setting Up for further information on locations. Back-valued commercial loan contracts can be entered. These contracts can be back-valued to the earliest history retention date as set up at installation. A base rate loan cannot be back-valued to a date before the effective date of the base rate to which it is linked. For each commercial loan contract, you can enter narrative events, which are used for reporting purposes. Each contract can have any number of associated narrative events, provided that each event has a different value date. If your bank is a participant in a syndicated loan, you can record details of the other participants (up to eight) for reporting purposes. For each commitment, you can enter memorandum information on a loan register. This helps the loans administration department to maintain documentary information for the commitment. An add-on rate can be applied to commercial loan drawdowns. It is included in the gross interest rate, but is accrued and reported separately. The interest, fee, profit share and add-on rates can be changed at any time after the start date and before the maturity/expiry date of the contract. Profit share can be applied to drawdowns and commitments. The profit share rate relates to a portion of the interest or fee revenue due to a third party, which has provided a part of the commitment funds. Interest and fee is accrued daily on both drawdowns and commitments. As well as the gross fee and interest, separate figures are calculated for add-on and profit share. The figures are reported daily, together with period-to-date accrual figures. See Euro Related Information in the Core Functions and Inquiries Guide, for details of currency conversion in Commercial Loan contracts

17 Introduction Commitment The first part of a commercial loan is a commitment. The commitment is an agreement to provide a client the facility to borrow up to a specified amount over a defined period. For this facility a fee is normally charged. Loans, called drawdowns, are then made against the backing commitment. Several drawdowns can be made against one commitment, but a drawdown cannot be entered without a commitment. When a commitment is entered, the undrawn amount is equal to the full commitment amount. Each time a drawdown is made against a commitment, the commitment undrawn amount is reduced. The system maintains the commitment undrawn amount at all stages of the commitment diary schedule. Relevant commitment events are updated as new related drawdowns are entered. See Schedule Events later in this section, for details of the schedule events available for each contract type. Drawdowns can commence at any time on or after the start date and before the drawdown finish date specified on the commitment. The drawdown client can be different from the commitment client but either both must have the same client group leader or the commitment client must be a group leader for the client making the drawdowns. The system ensures that drawdowns do not exceed the total committed amount, and that all associated drawdowns mature on or before the expiry date of the commitment. For information regarding split and combined drawdowns, see Splitting or Combining Drawdowns later in this section. The system processes the following types of commitment: Reducing single currency Reducing multi-currency Revolving single currency Revolving multi-currency For reducing commitments, the undrawn amount is reduced by the drawdowns made. For revolving commitments, the undrawn amount is restored when each drawdown is repaid. A multi-currency commitment involves drawdowns in different currencies. Up to nine drawdown currencies can be specified on the commitment. Drawdowns against the commitment must be made in one of these currencies

18 Introduction When the drawdown currency is different to the commitment currency, two of the following must be entered: Exchange rate Drawdown amount Commitment amount The third item is then calculated using the fields entered. Commitment Fees The only funds transferred on a commitment are the fees. The fee is calculated from the fee start date of the commitment and accrued until the drawdown finish date when the undrawn amount is reduced to zero and no further fees are accrued. A simple interest calculation based on the fee rate and the undrawn portion of the commitment is used to calculate the commitment fee. You can specify the settlement frequency for fees when you enter a commitment. The fee rate can be changed at any time on or after the fee start date and before the drawdown finish date. The final fee settlement can be either on, or after, the drawdown finish date. Note: You can also charge fees on a commitment (or any product) using Fees Maintenance (FEEMA). This facility enables you to charge more than one type of fee on a single commitment at differing rates. See the Fees Administration Guide for more information

19 Introduction Fixed Rate Drawdown Fixed rate drawdowns are those in which the interest rate is fixed at the start of the contract. The interest rate can only be changed at a later date by entering a schedule event. Base Rate Drawdown Base rate drawdowns are those in which the interest rate is linked to a base rate. A rate variation is added to or subtracted from the base rate to give the gross rate for the contract. You can also enter minimum and maximum rates for base rate drawdowns. If the gross interest rate falls outside these rates, the minimum or maximum rate is used. If the base rate to which a drawdown is linked changes, the interest rate for the drawdown automatically changes. When a base rate is changed, a report (the BASEUPD - Base Rate Update report, see the On-Demand Reports Guide for more information) updates the schedules of all related drawdowns. Base rate changes appear in the schedule as base rate change diaries. If interest is settled on the same day as a change in the base rate, the event appears in the schedule as a rollover. Back-valued base rate changes can also be entered. Interest amounts are automatically adjusted and payments or confirmations are reversed and reissued. All accounting entries are reprocessed and exposures are recalculated. Discounted Drawdown Discounted drawdowns are usually short term, low value loans where the total interest amount is paid in full at the start of the loan. The principal amount is repaid on maturity. The discount rate you enter is the rate of interest discounted from the principal at the start of the contract. The book value is the amount of funds available to the client at the start of the contract. The principal amount is repaid when the loan matures and is used to maintain the associated commitment undrawn amount. The book value is not used in relation to the commitment. The yield rate is the effective rate of interest charged to the client. Splitting or Combining Drawdowns The system enables you to split or combine drawdowns made against a reducing commitment. This enables a drawdown that has exhausted the commitment to be split into two or more drawdowns, or a number of drawdowns to be combined into a single drawdown. You can enter a split or combined drawdown to start on the drawdown finish date

20 Introduction Cost of Funds for Drawdowns Cost of Funds is a facility that allows you to calculate and report on the profit and loss arising due to all business activities carried out and all cost arising due to the funding of assets and liabilities. See "Cost of Funds" in the Guide to Setting Up. This calculation is reported on an accounting centre basis and reconciles with the monthly profit and loss statement of the institution. The INCOMESTMT - Income Statement report, see the Core On-Demand Reports Guide, groups accounting centres by area of business. Cost of Funds can be accrued using either one of the following two methods: Add-on Margin: Commercial loan contracts use this method of calculating cost of funds where the add-on rate will be the income attributable to the originating profit centre. The cost of funds income attributable to the Treasury accounting centre will be the client's rate minus the add-on rate. Funding Account: Funding accounts are defined for each product type so that the various product types can be funded under different conditions. The fundable balances derived from all transactions are taken to funding accounts from where the cost of funds are accrued. The profit or loss associated with a particular product will be ascertained by the relevant funding account set up for the product. See "Cost of Funds" in the Guide to Setting Up for details on setting up of funding accounts

21 Introduction Schedule Events When a contract is entered, the system creates diary events for input, start and maturity dates of the contract. Interest or fee settlement events are also scheduled if the interest or fee settlement frequency is specified for the contract. The chronological ordering of these events constitutes the contract schedule. If the contract is amended or deleted, the associated diary events are also amended or deleted. You can also enter other schedule events, depending on the type of contract. Two events on a contract cannot be scheduled to occur on the same day (with the exception of input diary events), they must be combined into one event. Also, an event that has been automatically generated cannot be manually changed to a Rate/Principal change (RP) event. The following table shows the diary events that are produced as a result of two events on a contract being combined. Table 1 1. Diary Event Combinations Interest/Fee Settlement Rate/Principal Change Interest/Fee Settlement Interest/Fee Settlement Rollover Rate/Principal Change Rollover Base Rate Change Rollover Rollover Rollover Rate/Principal Change Rollover Rate/Principal Change Rollover Rollover Rollover Rollover Rollover Base Rate Change Rollover Rate/Principal Change Rollover Base Rate Change

22 Introduction Commitment Schedule Events For commitments you can enter three types of schedule event: Fee settlement, which settles the calculated fee and the profit share. This can include adjustments or penalty amounts. A rate/principal change, which is a change in the fee rate, the profit share rate and/or the commitment amount. This can reduce or increase the commitment amount. A rollover, which is the combination of the above schedule events occurring on the same day Drawdown Schedule Events For drawdowns and base rate drawdowns you can enter three types of schedule event: Interest settlement, which settles the calculated interest and the profit share. This can include adjustments or penalty amounts. A rate/principal change, which is a change in the interest rate, rate variation, maximum/minimum rates, profit share rate, add-on rate or principal. The principal amount on the loan can be reduced or increased. A rollover, which is the combination of the above schedule events occurring on the same day, or a rolled rollover, where the interest, interest adjustments and penalty amounts are rolled into the principal instead of being paid. For multi-currency commitments, the drawdown exchange rate can be changed. Changes in the principal can be entered in either the commitment or drawdown currency, in which case two of the following three fields must be entered. The third field is calculated by the system from the information entered. Principal change in the currency of the drawdown Principal change in the currency of the commitment Exchange rate If all the three fields are entered, they are cross-checked against each other; an error message is displayed if the amounts do not match

23 Introduction Interest Accrual After Drawdown Due Date This functionality is available if blueprint parameter BP-ACCRINT-BYDD has been set to "Y" (see "Blueprint Parameters" in the Guide to Setting Up). On the business day before a fixed or base rate loan drawdown is due to mature, the system determines whether funds are available to pay the drawdown. If the funds are not available, then the contract will be rolled forward by one day if either the nostro account is a client account or a valid agent has been entered. The contract will be rolled forward on subsequent days until either: The funds are available, or The related commitment matures The LOANROLL - Loan Rollover report must be included in the overnight run for the rollover to take place (see the Overnight Reports Guide). This report will print a warning if a drawdown is rolling over close to the commitment's maturity. The number of days prior to maturity that the warning will be printed is defined using blueprint parameter BP-BYDD-DAYSWARN. Interest accrual will continue on the drawdown until it is paid. Note: The following entries must be present on the General Purpose Narratives (GNARR) table, type LT: CLBR Commercial Loan Base Rate Drawdown CLDD Commercial Loan Fixed Rate Drawdown

24 Introduction Confirmations and Payment Advices Input confirmations are printed when a contract is entered. Confirmations and payment advices for subsequent events are produced a number of days in advance of the event (for each country of residence). These subsequent confirmations and payments advices are produced during the overnight processing. For each contract entered, you can specify the priority of the S.W.I.F.T. messages generated for that contract, if applicable, by making an entry in the Message Priority field. If you leave this field blank, the default value selected at installation is used. Payments made as a result of commercial loan contracts (for example, drawdowns and interest settlement) will automatically be made through either a Nostro or a Settlement account. Where any payment would have been effected through a nostro that is used to compensate for another contract, no payment will be made as the amount is used as an offset to the other contract. Nostro and Agent Combinations The system automatically identifies the accounts between which payments are made, on the basis of the nostros and agents that have been set up for each particular contract giving rise to the notice or payment. Default nostro and agents may be allocated according to rules set up on the Nostro Settlement Defaults (NSDFM) and the Agent Settlement Defaults (AGDFM) tables. A nostro account is defined as our account with another bank (the correspondent). In order to correctly reflect any money held with another bank, the system maintains a copy of the nostro account in its own books. Nostro accounts are set up using the Nostro Details (NSTRO) table. They are identified by a nostro number and currency or a nostro name and currency. An agent is defined as a third party responsible for paying or receiving funds on a contract. Agents are set up using the Agent Details (AGNTM) table. They are identified by an agent nickname. For details of how to set up nostros and agents, see the Settlements Guide. Nostros and Agents can be specified when entering contracts using the Commercial Loans module. In order that instructions for the transfer of funds are correctly generated, using either the S.W.I.F.T. network or printed messages, the system ensures that only valid combinations of nostros and agents can be specified for each contract

25 Introduction The following table lists and describes valid combinations of entries in the nostro and agent fields. Note the following: A nostro can be identified by either its name or number. The use of an Agent does not necessarily indicate that an account relationship exists between the bank and the agent. For example settlement messages may be sent by the bank to its pay nostro, with information for onward transmission to the client s agent. Similarly, settlement messages may be received from the client s agent by the bank s receive nostro, with information for onward transmission to the bank. Standard settlement instructions can be entered to use the default settings for the nostro and agent for the contract. These instructions can be applied to the contract by entering SSI in the required Receive/Pay Nostro/Agent fields. Following acceptance of the contract, whenever it is displayed whether for maintenance or inquiry, the entered field will display SSI not the agent name/number or nostro/number. SSI cannot be entered for an agent or nostro if the default has not been defined. When SSI has been entered for an agent or nostro, the default agent and nostro details can be displayed by double clicking on the SSI entry. This facility is only available when you are using the Graphic User Interface (GUI). For fuller details, see the Core Functions and Inquiries Guide. Note: The default settings for both the agent and the nostro can be entered using other methods. Entering the number or name for the default agent or nostro will display the entered detail for the agent or nostro. Leaving the agent or nostro blank will result in the system applying the default, if available, or T (To be advised). Table 1 2. Entries in Nostro and Agent Fields Nostro Agent Description Number/Name Name Your correspondent and the client s agent are different. The agent s nickname is entered in the Agent field. Number/Name Number/Name The client s agent is one of your correspondents: 1. The nostro number/name in the Nostro field can be different from the nostro number/name in the Agent field. 2. If your correspondent and the client s agent are the same, the nostro number/name entered in the Nostro field can refer to the same nostro as that entered in the Agent field. Number/Name S Your correspondent and the client s agent are the same. (This is equivalent to 2. above). Number/Name U There is no agent

26 Introduction Nostro Agent Description Number/Name T Your correspondent is known; the client s agent is to be advised. If a S.W.I.F.T. message would normally have been sent, this combination will result in it not being sent - printed messages will be generated instead. V Vostro A/C No. Posting is to be made using a vostro (a client account in our books). The Agent field identifies the account to be used. D Name Posting is to be made directly from/to your bank to/from the client s agent. You can enter either an agent s nickname or a nostro number/name in the agent field. D U There is no agent. Posting is to be made directly from your bank to the error suspense account. When the receive account is known, use the batch postings facility to effect the transfer. D T Posting is to be made directly from your bank to a client s agent who is to be advised. If a S.W.I.F.T. message would normally have been sent, this combination will result in it not being sent - printed messages will be generated instead. T Name Your correspondent is to be advised; the client s agent is known. You can enter a nostro number/name in the Agent field. This combination will result in S.W.I.F.T. messages not being sent - printed messages will be generated instead. T U Your correspondent is to be advised and the client doesn t have an agent. This combination will result in S.W.I.F.T. messages not being sent - printed messages will be generated instead. T T Both your correspondent and the client s agent are to be advised. The settlement message will be sent directly to the nostro, when entered. This nostro/agent combination should be used with care when payment takes place at the start event. This combination will result in S.W.I.F.T. messages not being sent - printed messages will be generated instead. C T No payment is to be made, as the payment amount is to be compensated by a second contract

27 Introduction Nostro Agent Description SSI SSI The contract is to use the default nostro and agent defined using the Agent Settlement Defaults (AGDFM) screen and the Nostro Settlement Defaults (NSDFM) screen. Number/Name/ SSI/blank SSI Number/Name/ SSI SSI Number/Name/ SSI/Blank NSTD The contract is to use the default agent defined using the Agent Settlement Defaults (AGDFM) screen. The contract is to use the default nostro defined using the Nostro Settlement Defaults (NSDFM) screen. Settlement instructions specific to the contract are to be used for the agent. Enter NSTD in the Their Receive Agent field and clicking Settlement Instructions will link to the Non Standard Settlement Instructions (NSTDM) screen. Any of the Agent identifiers shown in Table 1-2 can be replaced by the exact S.W.I.F.T. address of the agent; the address will appear as part of the normal printed message. Only do so if you are certain of the address, which must be entered using symbol followed by the appropriate 8 or 11 character S.W.I.F.T. address. Only the following formats should Where: BBBB = Four alphabetic characters representing the S.W.I.F.T. bank identifier CC = Two alphabetic characters representing the S.W.I.F.T. country code LL = S.W.I.F.T. location code XXX = Three alphabetic/numeric characters representing the S.W.I.F.T. branch code (if applicable) Euro Related Information Economic and Monetary Union (EMU) is a process by which certain countries in the European Union are converting their national currencies (also called in currencies) into a single European currency called the Euro. The system supports this conversion process fully for all currencies and all phases of the conversion (see "Euro Related Information" in the Core Functions and Inquiries Guide for more information)

28 Introduction

29 Section 2 Commercial Loans Screens Introduction This section provides a description of each Commercial Loan screen: Commercial Loans Defaults Maintenance (CLDFM) CL Commitment (CLCMA/C/I) CL Commitment Schedule (CLCSA/C/I) CL Drawdown (CLDDA/C/I) CL Drawdown Schedule (CLDSA/C/I) CL Base Rate Drawdown (CLBRA/C/I) CL Base Rate Drawdown Schedule (CLDBA/C/I) CL Discounted Drawdown (CLDLA/C/I) Contract Diary Narratives (CNARA/M) CL Loan Participants (CLPTC) CL Loan Register (CLLOM) For each screen the following is provided: A description of its use An example of the screen A full description of the fields on the screens, and valid entries, is given in Section 3, Definition of Field Names. Please refer to the Starter s Guide for a description of how to access and use screens

30 Commercial Loans Screens Creating a Commercial Loan A commercial loan is created by setting up a Commitment contract and the Drawdown contracts related to the commitment. In addition to the contract creation screens, you can optionally schedule events and set up memorandum details for each contract. The commercial loan creation process is illustrated in the following flow. Set up the defaults for all commercial loan contracts Commercial Loans Defaults Maint (CLDFM) Add details of Commitment contract If required, enter schedule for: fee settlement, rollover, rate/principal change Commercial Loan Commitment - Add (CLCMA) Commercial Loan Commitment Schedule - Add (CLCSA) Commercial Loans Register (CLLOM) Commercial Loan Participants (CLPTC) Contract Diary Narrative - Add (CNARA) If required, enter memorandum details for individual Commitment or Drawdown contracts If required, enter details of participants in a syndicated loan If required, enter diary events for any individual Commitment or Drawdown contract Define Drawdown contracts related to Commitment contract Commercial Loan Drawdown - Add (CLDDA) Commercial Loan Base Rate Drawdown - Add (CLBRA) Commercial Loan Discounted Drawdown - Add (CLDLA) If required, enter the schedule events for the Drawdown contracts Commercial Loan Drawdown Schedule - Add (CLDSA) Commercial Loan Base Rate Drawdown Schedule - Add (CLDBA) Figure 2 1. Flow of Commercial Loan Creation Screens Note: Screens are available that allow you to change, delete and inquire on: - Commitment contracts and their schedules - Drawdown contracts and their schedules

31 Commercial Loans Screens Prerequisites Before you can enter a Commercial Loan contract, certain items referenced by the contract must be set up. The following list shows the mandatory items and the business tables on which they are set up: Accounting Centre - Accounting Centres Maintenance (ACNTM), see the Guide to Setting Up. Location Code - Location Maintenance (LOCTM), see the Guide to Setting Up. Portfolio - Portfolio Definition (PFDFM), see the Risk Management Administration Guide. Product Type - Product Types Maintenance (PRTPM), see the Core Functions and Inquiries Guide. Currency - Currencies (CCYS), see the Guide to Setting Up. General Ledger Master - General Ledger Master (GLMAM), see the General Ledger Administration Guide. Dealer - Dealers and Officers (DEALR), see the Core Functions and Inquiries Guide. Clients - Client Details - Banking (CIWSL), see the Clients and Accounts Administration Guide

32 Commercial Loans Screens Commercial Loans Defaults Maintenance (CLDFM) Use this screen to set up default details for a Commercial Loan product type. The defaults that you enter here can be recalled on contract deal entry screens as follows: T On the blank deal entry screen, enter Product Type and click Add On the blank deal entry screen, enter Product Type and press Transmit The availability of defaults for a product saves key strokes when entering a deal and helps to standardise details across deals involving the same product. Default details include currency, drawdown defaults and settlement details. Any of the defaults recalled onto a contract entry screen may be over written. The defaults that you set up on the Commercial Loan Defaults Maintenance (CLDFM) screen are associated with a Product Type. Product Types are defined on the Product Types Maintenance (PRTPM) screen, see the Core Functions and Inquiries Guide for more information. The following figure shows an example of the Commercial Loans Defaults Maintenance screen. Figure 2 2. Commercial Loans Defaults Maintenance screen

33 Commercial Loans Screens Commitment Contract Screens Before clients can make drawdowns against commercial loans, it is first necessary to enter details of the contracts recording the commitment amounts against which the drawdowns will be made. The following screens are used to define and maintain the facility against which customers can make drawdowns. CL Commitment Add (CLCMA) CL Commitment Change (CLCMC) CL Commitment Inquire or Delete (CLCMI) See Commitment and All Contracts in Section 1 for an introduction to commitments and their contracts. CL Commitment Add (CLCMA) The system uses the information entered on the CL Commitment Add (CLCMA) screen to process the fees associated with the commitment. The Commitment Amount is a contingent amount and is available for posting to the general ledger. Accounting model rules define the general ledger account to which this amount will be posted. When entering the Expiry and Drawdown Finish dates, the following rules apply: The Drawdown Finish date cannot be later than the Expiry date If no dates are entered in either field, then Days Notice must be specified If an Expiry date is entered, then the Drawdown Finish date must be specified If the Facility Type is Revolving multi-currency (VM) or Reducing multi-currency (RM), then you must enter at least one Drawdown Currency. The nostro and agent fields are used to indicate the account used for fee settlement. When fees are paid, they will be posted to the account defined by Our Receive Nostro. See also Nostro and Agent Combinations in Section

34 Commercial Loans Screens The following figure shows an example of the CL Commitment Add screen: Figure 2 3. CL Commitment Add Screen

35 Commercial Loans Screens CL Commitment Change (CLCMC) The CL Commitment Change (CLCMC) screen can be used to change non-financial details of the commitment at any point before the contract matures. However, it cannot be used to perform a direct change to the financial details of the commitment, such as the commitment amount, the fee rate and the profit share rate. Changes to the financial details can only be effected by scheduling an event using the CL Commitment Schedule Add (CLCSA) screen. Changes to settlement details using CL Commitment Change (CLCMC) screen can only be made on the day the contract is input, or against unstarted (future dated) contracts. Any other changes to settlement details after a contract has started can be made using the CL Commitment Schedule Add (CLCSA) screen. You can use the CL Commitment Change (CLCMC) screen to change the expiry date and the drawdown finish date of the contract. This causes a change in the fee settlement because the fees are calculated on a simple interest basis and the final fee settlement can be either on or after the drawdown finish date. You can also use the CL Commitment Change (CLCMC) screen to initiate conversion of an in (national) currency contract to euro. (See Euro Related Information in the Core Functions and Inquiries Guide.) This screen permits to change the Nostro\Agent, only for the contracts pre-matured to the current date or before. The following figure shows an example of the CL Commitment Change screen:

36 Commercial Loans Screens Figure 2 4. CL Commitment Change Screen CL Commitment Inquire/Delete (CLCMI) The CL Commitment Inquire/Delete (CLCMI) screen can be used to perform an inquiry on any commitment contract. After performing an inquiry on a commitment you can delete it if: The contract has not matured. If the contract has matured, then it cannot be deleted unless the blueprint parameter BP-CNT-MATDEL-DYS (see Blueprint Parameters the Guide to Setting Up) has been used to specify that matured contracts can be deleted. Using the blueprint parameter you specify the period after maturity during which a contract may be deleted. There are no outstanding drawdowns against it No drawdowns have been made against it If a commitment is deleted then all accruals and settlements are backed out. Daily accruals are backed out during overnight processing on the day of deletion. Monthly accruals are backed out during overnight processing at the next month-end. The CL Commitment Inquire/Delete (CLCMI) screen has the same layout as the CL Commitment Change (CLCMC) screen

37 Commercial Loans Screens Commitment Schedule Screens Once commitment details have been defined, using the CL Commitment Add (CLCMA) screen, the basis of the original contract cannot be changed. However, it may become necessary to make changes to the schedule associated with the contract. The following screens are used for this purpose. CL Commitment Schedule Add (CLCSA) CL Commitment Schedule Change (CLCSC) CL Commitment Schedule Inquire or Delete (CLCSI) See Schedule Events in Section 1 for an introduction to commitment schedules. CL Commitment Schedule Add (CLCSA) The CL Commitment Schedule Add (CLCSA) screen is used to schedule events that change the commitment contract schedule, between its start and maturity dates. For each commitment you can schedule the following events: Fee settlement (including profit share element) A change in the fee rate or the profit share or the commitment amount A rollover A penalty amount Adjustments When changing the commitment amount you must indicate, in the Result of Change field, whether the change is a reduction to or an extension of the amount. Note: If you use the CL Commitment Schedule Add screen to change a rate, the new rate will apply thereafter, until any subsequent change in principal is recorded, in which case the rate will revert to that which was entered on the original contract entry screen

38 Commercial Loans Screens The following figure shows an example of the CL Commitment Schedule Add screen: Figure 2 5. CL Commitment Schedule Add Screen CL Commitment Schedule Change (CLCSC) The CL Commitment Schedule Change (CLCSC) screen is used to change the details of commitment schedule events that have already been added using the CL Commitment Schedule Add (CLCSA) screen. A scheduled event can be changed if its value date has not been reached. Note: If the value date of a contract diary event has been reached, then it cannot be updated unless blueprint parameter BP-BACK-VAL-DT (see Blueprint Parameters the Guide to Setting Up) has been used to specify that actioned events can be updated. Using this parameter you specify the period after the value date during which an event may be updated. The CL Commitment Schedule Change (CLCSC) screen has the same layout as the CL Commitment Schedule Add (CLCSA) screen