Tony Williams,  Loan Technologist

Any one of the various depository accounts available to a bank's customers, such as a checking account, certificate of deposit account, savings account, etc.
 

See Account Officer..

The primary person responsible for maintaining the bank's overall relationship with a borrower client. Also known as a Relationship Manager or an Account
Executive.
 

System ability to record the person (with time and date) responsible for initiating or approving a transaction.

Accounts that are affected by future cash receipts and payments. Accrual accounting records the financial effects of transactions in the period in which they occur, 
rather than when cash is received.
 

Fee paid by the borrower to the bank for administering a credit facility (e.g. line of credit, revolver, etc.). It is usually paid quarterly, in arrears.
 

In some cases, due to strong client relationships or particular expertise, a deal may have more than one agent bank. The administrative agent is the agent bank
responsible for the ongoing administration of the deal, such as informing primaries of drawdowns and interest rates, due dates for fees or principal reductions, etc.
(See also Agent Bank)

The number of days in advance that a customer is billed for charges such as interest and fees. For example, if interest and fees are due at the end of each quarter, a
bill may be generated and sent to the customer ten days prior to quarter end covering all expected charges for the quarter. If the amount owed changes during this
advance billing period, a corrected bill is sent.

A typically short term, non-binding, indication between a bank and a customer whereby the bank indicates the maximum amount it would consider lending to the
customer over a specified timeframe. At its sole discretion, the bank may at any time decline the customer's request to borrow under this facility.

Fee charged to a customer for providing financial or other advice, usually payable quarterly, in arrears.

See Agent Bank.

Fee paid to the Agent Bank by the borrower(s) for performing agency functions. It is usually paid on a quarterly or annual basis, in advance.

In a syndicated deal, the bank that co-ordinates all activities with the borrower and the bank group such as negotiation of the credit agreement, coordination of
legal documentation, ongoing administration of the deal, etc. In a deal where more than one bank fills this role, the banks are referred to as Co-Agents.
 

The interest rate applied to a particular borrowing. From the borrower's perspective, it is composed of the -sum of the reserve adjusted base rate plus the applicable
spread. From the bank's perspective, it is the bank's cost of funds plus some spread. (Also known as "Effective Rate")
 

A legal document that modifies the original credit agreement or letter of credit. Modifications may range from minor technical changes to major restatements of the
agreement's terms and conditions.

A fee charged to the borrower for amending a credit agreement.
 

An attachment to a legal agreement between the bank and an investor which states the specific closing information with regard to a participation/assignment (i.e.
funding amount, rates, etc.).
 

The percentage of interest accrued on a loan over the course of a year.
 

See Syndication Fee

The interest rate provided by the treasury group when it is informed of the rollover of a match-funded loan after the re- pricing date.
 

As used in the context of portfolio management within a bank, an asset refers to loan/facilities/deals made by the bank which will either be retained on the bank's
books or sold in the market. The decision to hold or sell an asset is affected by many factors, including the asset's relative risk and yield, bank strategy, the level of
market interest rates, etc.
 

The legal entity that buys all or part of the share in a syndicated facility from a primary member (the assignor) and assumes all of the rights and responsibilities of
the primary member for the portion of the facility purchased. These rights and responsibilities include direct contact with the borrower, full voting rights, etc.
Although an assignee becomes a peer with the primaries, it is not referred to as a primary, because it was not part of the original deal syndicate. (Different from
Participant) (Sec also Assignment)
 

The formal, legal transference of all rights and responsibilities from the assignor to the assignee with respect to a specific portion of a syndicated facility. This
transference creates a direct relationship between the borrower and the assignee.
 

The formal, legal document that evidences an assignment.

See Assignee.

See Assignment.

The legal entity that, as a primary member in a syndicated facility, sells all or part of its share to another party (the assignee), thereby relieving itself of all rights and 
responsibilities with respect to the portion sold.
 

System ability to trace the status and contents of transaction records through output, processing, and source.
 

The various approval levels established in the system based on transaction type and function.
 

A term loan whose repayment terms call for no interim installment payments of principal or minimal interim installment payments of principal with the bulk of 
repayment coming in one large, lump sum at maturity. Scheduled interest payments arc made during the intervening periods. (See also Balloon Payment, Serial 
Loan, and Non-Serial Loan)

In the case of term loan repayments, this phrase refers to a large, final principal payment at maturity. This final payment may be the entire amount of the term 
loan, or it may be the final payment in a stream of smaller, regularly scheduled installments.

This financial instrument is a form of discount financing typically arising out of letter of credit transactions. Once a letter of credit has been presented to the issuing 
bank by the beneficiary and has been accepted (i.e. all documentation is in order), the corresponding time draft is stamped "accepted." Since the time draft is usually payable at the end of some predetermined financing period (e.g. 90 days), the bank usually pays the beneficiary a discounted amount. The draft is then sold in the marketplace by the bank at a discount. At maturity, the investor who has bought the draft in the market will receive its full face value from the bank.

 

The rate option (e.g. LIBOR, CD, Prime, etc.) chosen by the borrower to which a spread is added to obtain the All-In-Rate. The base rate can be a floating 
interest rate that may vary from day to day or a cost of funds rate that is re-priced at set intervals.
 

Item counts, proof totals, or other computation methods used to control the input into a system. The purpose is to ensure that all source documents are controlled
and properly input.
 

With respect to an SBLC, the beneficiary is the party to whom the SI31 C is payable. Any changes to the SBLC requested by the borrower must be approved by
the beneficiary.
 

The price offered by those entities wishing to purchase a particular asset, such as loans, stocks, bonds, etc.

See Deal Prospectus.

The amount recognized by the bank on its internal records as being owed by the borrower. This amount includes all accrued interest to date and excludes any
charged-off portion of the loan. It might be used, for example, as the basis for working out a debt restructuring or for a lawsuit to recover unpaid amounts. (See
also Legal Balance)
 

For a loan, the original borrowed amount, less any amount that has been charged off, less unamortized fees. For discounted loans, this amount generally refers to
the full amount of the loan (i.e. the discount is not deducted from the loan amount), less any amount that has been charged off, less unamortized fees.
 

Any legal entity that obtains funds from the bank for a period of time for some consideration. The borrower usually signs a note as evidence of the indebtedness.

Costs associated with the prepayment by the borrower of a match funded loan or the sale of a match funded loan to an investor between repricing dates. Since a
bank locks in a certain funding cost (e.g. 1 month LIBOR, 60 day CD, etc.) under a match funded loan, any prepayment of the loan may require the bank to
redeploy the funds in a lower yielding asset, thereby reducing the bank's spread. Depending on the bank's relationship with the customer and prevailing interest
rates, this loss in yield may or may not be passed on. A gain in yield is never passed. on.
 

A person or firm that matches sellers of financial instruments with buyers of those instruments for a profit in the form of a fee. A broker does not maintain an
inventory. (Different from a "Dealer")
 

A listing of deals that various dealers and investors are seeking to purchase.

Rate setting for this pricing option is on the same day that the loan will be effective and is usually set for 30, 60, 90, or 180 day periods. The rate quoted by the
funding desk is already adjusted for reserves; only the applicable spread needs to be added to determine the All-In-Rate.

The portion of a loan that the lender believes will not be repaid by the borrower and has written off against the loan reserve, thereby reducing the book value of
the loan.
 

A unique code which identifies a customer to the Clearing Hlouse Interbank Payment System for wire transfer purposes.

The designation of an anticipated loan sale once a commitment letter is received from the investor confirming the dollar amount committed, pricing, etc. It is
highly unusual for a circled deal not to close. Closing occurs when the investor funds his commitment in accordance with the terms of the Assignment Agreement
or Participation Agreement.
 

The share of a facility to which an investor has committed. While the transaction has not yet formally closed with the execution of all necessary documentation,
the bank and investor have verbally agreed to all the terms and pricing of the sale and the investor has provided a commitment letter confirming the dollar amount,
pricing, etc.
 

A surcharge paid by the borrower for accessing a part of a commitment that was held in reserve. This arrangement arises when a borrower negotiates to split the
funds available under a revolving credit into two tranches: an "available" and an "unavailable" portion. This terminology strictly refers to the commitment fee
applied to the two tranches and in no way inhibits the borrower from drawing down funds under either tranche. The commitment fee on the available portion (e.g.
1/4% p.a.) is higher than that on the unavailable portion (e.g. 1/8% p.a.). However, if the borrower decides to access the unavailable portion, the commitment fee
on those funds usually increases to some premium (e.g. a jump up to 3/8% p.a.), retroactive to some point in the past (e.g. six months).
 

See Syndication Fee.

See Agent Bank.

The tangible and/or intangible assets used to secure a loan in the event of non-payment by the borrower. These items may be market-priceable such as stocks,
bonds, and commodities, or may require special valuations such as real estate, patents, accounts receivable, etc.
 

The shortfall between the outstanding amount of a loan (or percent of a loan requiring collateral) and the current value of the collateral held by the bank to secure
that loan.
 

With respect to an SBLC, the fee that is based on a percentage of the total amount of the letter of credit outstanding, typically billed to the borrower quarterly, in
arrears.
 

A facility that has an underlying contractual agreement between the bank and the borrower to lend a specific dollar amount for a specific period of time, subject to
the terms and conditions of a loan agreement (e.g., revolving credit, term loan). Under a commitment, the bank has a legal obligation to fund any loan request,
providing that the borrower is in compliance with the loan agreement.

See Syndication Fee.

Accounts that are affected by the movement in commitment amounts or usage.

A drawdown option that may be available under a credit agreement allowing the borrower to seek bids from all members of the bank syndicate on a cost of funds
pricing basis different from any contractual pricing formula contained in the credit agreement in order to obtain the lowest possible rate. Under this option, banks
can hid to lend more or less than their pro-rata share under the loan agreement or can elect not to bid at all. The borrower meets its funding needs by accepting the
lowest bids up to the amount required. Typically, the agent bank running the competitive bid must submit its bid one hour in advance of the other banks. Only
the bank(s) winning the bid fund the loan; however, borrowings under the competitive hid option reduce availability by the amount of the borrowing and reduce
each bank's unusec, commitment fee in the ratio that the borrowing bears to the total amount committed under the facility.

The fee charged by the administrative agent to the borrower for running the competitive bid auction (usually paid each time an auction is run).
 

A certificate prepared by the borrower on a regular basis as outlined in the credit agreement and delivered to the bank group stating that the borrower is in
compliance with all of the terms and conditions of the credit agreement and that no event of default has occurred. The compliance certificate is signed by an
authorized representative of the company, typically the chief financial officer or treasurer.
 

The letter a prospective investor sums in order to receive a Deal Prospectus. This letter states that the prospective investor agrees to keep all of the information
confidential.
 

A liability that will only exist upon the occurrence of a particular event. For example, a standby letter of credit is a contingent liability until it is drawn upon by the
beneficiary, at which time it becomes a liability. The bank's obligation to honor the standby letter of credit is contingent on the action of the beneficiary.
 

An account affected by a change in a contingent liability, such as a standby letter of credit.

An account used to post offsetting debit or credit entries.

 1. The conversion of a loan from one pricing structure to another (e.g. from LABOR to Prime).

 2. The conversion of a revolver to a term loan.

A stand alone legal entity that functions independently of a parent corporation.
 

Represents the cost to the bank (inclusive of reserve adjust- ments and exclusive of spreads) to raise a certain amount of money for a specific period of time in
order to fund a loan request. This activity is handled by the bank's funding desk.
 

See Facility.

The legal document (contract) that states all the terms and conditions of a specific deal/facility including amount, rate, tenor, facility type, etc. The document is
signed by the borrower and the primary lender(s), one of which is usually the administrative agent.
 

See Facility.

Any one of the various lists maintained by different areas of the bank to track customers (e.g. borrowers, investors, guarantors, syndicate members, etc.) which are
considered to be at financial risk.
 

A customer is any legal entity that has or has had a business relationship with the bank. Customers can play many different roles simultaneously. Although only
one entry for this customer exists in the database, it reflects the various relationships that this customer has or has had with the bank. Overall, these customer roles
fall into one or more of the following categories:

 • Origination:
   — Borrower
   - Agent
   - Co-Agent
   — Syndicate Member
   - Beneficiary

 — Guarantor
• Distribution:
  — Participant
  — Assignee
• Loan Trading:
  - Buyer
  - Assignor
  - Participator
  - Dealer

(See also Prospect.)