Example: Manual Renewal
A main master contract, MC #1, contains two fully-disbursed participant loan accounts operating under the Planned Payment Principle:
LO #1 with a committed limit of EUR 130,000
LO #2 with a committed limit of EUR 70,000
Customizing
The master contract is based on a product in which the Facilities feature is active and which is customized as follows:
Facility Control
Attributes |
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. Positive balances are not taken into account. |
Clearing Mode for Currency Translation |
1 — Clearing After Currency Translation |
Utilization Calculation
The Master Contract
The nominal utilization is to be checked against the global internal limit. The effective utilization is to be checked against the global external limit.
Participant Loan Accounts
The utilization calculation base relevant for nominal utilization is Commitment Capital. The utilization calculation base for effective utilization is Effective Capital plus Prenotes.
Master Contract and Account Processing
MC #1 has a committed limit of EUR 200,000 and a tolerated overdraft limit of EUR 10,000.
When you seek to manually renew the loans, the system checks the utilization of the facility.
With a nominal utilization calculation base, the loan capitals minus the repayments made on the LO #1 does not exceed the global internal limit (EUR 200,000) and the manual renewal is executed.
With an effective utilization calculation base, the loan capitals minus the repayments made on both loans does not exceed the global external limit (EUR 200,000) and the manual renewal is executed.
Calculation of the Nominal Utilization:
Participants |
Global Internal Limit |
Nominally Utilized Amount |
Non-Utilized Amount |
MC #1 |
210,000 |
–210,000 + repayment 1 |
10,000 + repayment 1 |
LO #1 |
–130,000 + repayment 1 |
||
LO #2 |
–70,000 |
Calculation of the Effective Utilization:
Participants |
Global External Limit |
Effectively Utilized Amount |
Non-Utilized Amount |
MC #1 |
200,000 |
–70,000 + repayment 1 + repayment 2 |
0 + repayment 1 + repayment 2 |
LO #1 |
–130,000 + repayment 1 |
||
LO #2 |
–70,000 + repayment 2 |