Loan-to-Value
Ratios 
Use
This function describes the calculation of key date (last date) related ratio of lending value of assets (collateral objects) with reference to the prior charges, collateral right and the collateralized receivables. You can use the loan-to-value ratios to determine the extent to which the lending value is encumbered by prior charges.
The system considers the following parameters in the calculation of the loan-to-value ratios:
· Assessment value and the sum of the receivables assigned to the collateral agreement
· Prior charges (sum of all the higher ranking charges)
· Lending value (lending value determined from the analysis of the collateral constellation)
Activities
The system determines the loan-to-value ratios both in the absolute and percentage terms. It calculates the loan-to-value ratios using one of the following equations:
Condition |
Absolute / Relative Loan-to-value |
Loan-to-value ratio is equal to: |
Prior charges |
Absolute |
Value of prior charges for the collateral agreement |
|
Relative |
Prior charges / lending value * 100 |
Collateral right |
Absolute |
Collateral right + prior charges |
|
Relative |
Absolute loan-to-value (for collateral right) * 100 / lending value |
Receivables |
Absolute |
Sum of receivables linked to the collateral agreement + prior charges |
|
Relative |
Sum of the receivables assigned to the collateral agreement + prior charges) / lending value * 1000. |
Example
Collateral object 1 with lending value 360 and prior charges 150 Collateral object 2 with lending value 540 and prior charges 100 Collateral agreement B with value 800, receivable 2 (600) and receivable 3 (200)
|
|
Types of loan-to-value ratios for collateral agreement B |
Loan-to-value ratio is equal to: |
Absolute value for prior charges |
150 + 100 = 250 |
Relative value for prior charges |
{(150 + 100) * 100} / (360 + 540) = 27.8% |
Absolute value for collateral right |
800 + (150 + 100) = 1050 |
Relative value for collateral right |
(1050 * 100) / (360 + 540) = 116.7% |
Absolute value for receivables |
(600 + 200+150+100) = 1050 |
Relative value for receivables |
(1050 * 100) / (360 + 540) = 116.7% |