Business Transactions (SAP Library - Collateral Management (FS-CMS))

Business Transactions

Special arrangement scenarios for business transactions are different from the normal special arrangement scenarios in that they do not have any specific data of their own and use portion restrictions to determine behavior of collateral agreements.

This document contains information on some example business transaction scenarios and how they must be handled in Collateral Management.

Trust Holding

The real estates can be partially or completely managed by trusts (an alternative to assignment). A trust holding can be received from or issued to another bank.

Special Arrangement Scenario

Dependencies

Influence on Collateral Agreement (To Be Defined Manually)

Possible Settings for Portion Restriction

Trust Holding Assigned to Third-party

None

Set the corresponding restrictions for the portions of the real estate lien.

If the complete lien is managed by the trust, internal receivables must be removed from the collateral scope.

If the compl

ete lien is managed b None y the trust, internal receivables must b

Restrict availability of collateral (corresponding to the share managed by trust) for own bank. Set appropriate portion restriction.

If complete real estate lien is managed by a trust, internal receivables must be removed from collateral scope.

Blocking category: Automatic Links

Receivable type: Own

Trust Holding Assigned by Third-party

An external real estate lien already exists in Collateral Management

Internal bank can use external collateral agreement.

Appropriate portion restrictions must be specified for the portions of the external collateral agreement.

Receivables of own bank can be assigned to external collateral agreement.

Blocking category:

Manual Links or Automatic Links

Receivable type: Other

Assignment

A real estate can be partially or completely assigned to a third party. The assignment can be executed with or without any modifications in the land register entries for real estate.

Special Arrangement Scenario	Dependencies	Influence on Collateral Agreement (To Be Defined Manually)
Complete Assignment (to third-party)	Entry made in land register	Real estate lien must be set to Inactive.
Partial Assignment (to third-party)	Entry made in land register	Reduce the nominal value and assessment amount of real estate lien by assigned amount. If assigned amount has priority over remaining amount, you must create an external lien with the assigned amount and assign a higher priority.
Partial Assignment (to third-party)	Entry not made in land register	In the external lien: 1. Define two portions – one for the assigned amount and another for the remaining amount. 2. Block the portion representing assigned amount using portion restriction – Assigned to third-party. 3. Assign internal receivables to portion representing remaining (unassigned) amount.
Complete Assignment (by third-party)	Irrespective of entry in land register	If external lien exists in Collateral Management as a prior charge, set the external lien to Inactive and create an internal lien for the assigned amount. If external lien does not exist, create an internal lien for the assigned amount.
Partial Assignment (by third-party) where external lien can be used by own bank	Entry made in land register	Reduce the external real estate lien by the assigned amount and create an internal lien for the corresponding amount.
Partial Assignment (by third-party) where external lien can be used by own bank	Entry not made in land register	Create two portions in the external lien, one representing the assigned amount and one for the remaining amount. Set a portion restriction Assigned to third-party for the assigned portion.

Non-recurring Loan Undertaking

If third party rights with priority exist, a bank taking the collateral cannot use free collateral for collateralizing further receivables. In such scenarios, non-recurring loan undertakings can be used to utilize free collateral. A non-recurring loan undertaking can be received from another bank or issued to an external bank.

Special Arrangement Scenario

Dependencies

Influence on Collateral Agreement (To Be Defined Manually)

Possible Settings for Portion Restriction

Get non-recurring loan undertaking

Adjust assessment amount of prior charge to the current value of external receivables (of the other bank). This means that the third-party no longer has priority on the free collateral.

Blocking category: Automatic or Manual Links

Receivable type: Own

Issue non-recurring loan undertaking

Adjust assessment value of real estate lien to current value of receivables of own bank.

No further collateralization is possible. Set an appropriate portion restriction.

Blocking category: No New Links

Receivable type:

Assignment of Restitution Claims

If the existing claims are repaid, the collateral giver is authorized to use the free collateral (a collateral portion corresponding to the same). Such restitution claims can be received from or issued to external banks.

Special Arrangement Scenario

Dependencies

Influence on Collateral Agreement (To Be Defined Manually)

Receive restitution claims from another bank

Receiving Restitution Claims

Collateral issuer assigned the entitlement to a third-party

The assessment value of the prior charge must be adjusted to the current value of the assigned external receivables.

Adjust the assessment amount of the prior charge to the current value of receivables assigned to the external lien (of the bank owning the restitution claims).

Assign restitution claims to another bank

The collateral issuer assigned the restitution claims to own bank.

No further receivables can be added to the collateral scope.

No further collateralization is possible. Set appropriate portion restrictions to the internal real estate lien.

Assigning Discharge Claims

After complete repayment of a claim, the collateral issuer is entitled to either delete or release the real estate lien. The collateral issuer can assign the claim to own bank. The bank in-turn can assign the claim to a third-party. A number of sequential discharge claims can be assigned to a real estate lien. They can receiving the right to discharge if the claims entered before them are deleted.

Special Arrangement Scenario	Dependencies	Influence on collateral agreement (to be defined manually)
Receiving Assignment of Discharge of Claims		The document for receiving assignment of discharge of claims can be assigned to the real estate lien. This business transaction has no influence on processes in Collateral Management.
Assigning Discharge of Claims		The document for assignment of discharge of claims can be assigned to the real estate lien. This business transaction has no influence on processes in Collateral Management.