Example: Change to External Limit of a Main Master Contract
Your master contract-managing system has a facility with three participants, who have the same currency of Euro:
Main Master Contract MC1
Participant Loan Account LOAN1
Participant Loan Account LOAN2
Customizing
Main master contract MC1 has a product in which the Facilities feature is active, and that you have set up as follows:
Facility Control
Attribute |
Value |
Credit Clearing Mode |
1 - Debit Balance: The utilization balance of a master contract is the sum of all negative balances of the participants in this master contract. The system ignores positive balances. |
Clearing Mode for Currency Translation |
1 - Clearing After Currency Translation |
Utilization Calculation
Main Master Contract:
The system is to check the effective utilization against the global internal limit. The system is to check the nominal utilization against the global internal limit.
Participant Loan Account:
The effective utilization includes participant loan accounts with the calculation basis "Effective capital + prenotes". The nominal utilization includes participant loan accounts with the calculation basis "Contract capital".
Master Contract Processing
The master contract has a committed limit of EUR 200,000 and a tolerated overdraft limit of EUR 50,000.
Loan account LOAN1 has a committed limit of EUR 130,000 and loan account LOAN2 has a committed limit of EUR 70,000. Loan account LOAN1 has been fully disbursed, and no repayment has been made. You have not yet activated a disbursement for loan account LOAN2.
Limit Changes to a Main Master Contract
You decrease the committed limit of the master contract MC1 to EUR 150,000. When you save the facility, the system issues an error message that shows that the nominal utilization of the loan accounts LOAN1 and LOAN2 (EUR 130,000 and EUR 150,000 respectively) would exceed the new global external limit of the master contract by EUR 150,000. Therefore, you do not make the change.
You increase the committed limit of the master contract MC1 to EUR 250,000. The system executes the change.
Facility Display Function
If you display the master contract facility after the increase, the system displays the following calculation results:
Display of the Nominal Utilization
Participants |
Global External Limit |
Utilized Amount |
Non-Utilized Amount |
Subtotal |
MC1 |
250,000 |
– 200,000 |
50,000 |
|
LOAN1 |
– 130,000 |
|||
LOAN 2 |
– 70,000 |
Display of the Effective Utilization
Participants |
Global Internal Limit |
Utilized Amount |
Non-Utilized Amount |
Subtotal |
MC1 |
300,000 |
– 130,000 |
170,000 |
|
LOAN1 |
– 130,000 |
|||
LOAN2 |
0 |