Tony Williams,  Loan Technologist

A potential customer that has been identified from the various lists of prospects as being a likely candidate for a particular transaction.
 

An abbreviation for Relationship Manager. (See Account Officer.).

The profit spread received by the lending area

The method of calculating the daily interest and fee accrual. Some examples are ACTUAL/360 (hank), 30/360 (bond), and ACTUAL/365 (government).

A control mechanism verifying the number of records entered to those processed and output.
 

Any portion of principal, interest, or fees paid by the borrower which exceeds the book value of the loan after the lender has written off all or part of the loan. This
amount is considered "recovered."
 

Banks whose Cost Of Funds (COI) for LIBOR, Euro, or CD pricing are used to calculate an average COT for a particular loan. The Reference Banks are listed
M the credit agreement.
 

Regulatory principles used in the accounting and reporting of financial data as defined by primary bank regulators in the United States.
 

See Account Officer.

The process of assigning the current quoted rate to a match- funded loan on the rollover date.
 

A base rate (such as I.,IBOR or CD) after all applicable adjustments for reserves, FDIC insurance, etc.
 

An internal list of clients with which the bank wants to limit partially or completely its business relations due to policy, political, legal, or other reasons. Some
examples might be those companies currently conducting business in South Africa or companies restricted by the State Department or other government bodies.
 

See Revolving Credit

A typically long term commitment by the bank to extend a maximum amount of credit to the borrower(s) for a specified period of time under the terms and conditions set forth under a credit agreement. Funds borrowed and repaid can subsequently be reborrowed until the expiration of the facility. As long as the borrower remains in compliance with the terms of the credit agreement, the bank can not refuse a funding request.
 

Sec Revolving Credit.

A revolving credit facility under which the customer may borrow, repay, and reborrow the total commitment up to the expiry date, at which time any outstandings
under the revolver can be converted into a term loan. Once conversion takes place, amounts repaid (whether scheduled or unscheduled) cannot be reborrowed.
 

The process whereby a match-funded loan is renewed for an additional period and (probably) assigned a new cost of funds rate.

The date on which the next rollover is scheduled to occur.

Abbreviation for Standby Letter of Credit.

Fee charged to the borrower for outstanding Standby Letters of Credit. It is usually calculated as a percentage of the outstanding SBLC face amount per annum,
payable quarterly, in arrears.
 

Any automatic increases or decreases; automatic extensions or non-extensions of automatically extendable expiry dates; foreign currency revaluations; and fixed
expiry dates.
 

See Secondary Member

See Secondary Member.

Any entity that buys a part of a deal/facility/loan after the primary syndication is completed. Secondary members are typically participants (i.e. they are unknown
to the borrower and have limited voting rights); however, sometimes assignees are considered secondaries. (See Assignee and Participant)
 

Debt that is paid ahead of other (i.e. subordinated) debt if liquidation occurs.

A loan where the principal is paid in regularly scheduled payments.

The passage of the rights, obligations, risks, and benefits from the seller or assignor to the investor pursuant to the underlying sales agreement.
 

The date on which settlement occurs

The risk that a participant, assignee, assignor, or seller will not settle on the date or in the manner outlined in the sales agreement.
 

Assets in which the bank is the Agent and/or participant. On an annual basis, the hank must furnish the following information to the appropriate regulatory agency
name of borrower, location, outstanding balance and any unused commitment.
 

With respect to a facility, short term usually denotes a tenor of less than one year.

The differential between the interest and fees received from the borrower and those passed on to the investor. (Also referred to as a "Holdback").
 

The process whereby a borrower elects to split a single loan into different amounts, rate options, or maturities at a repricing date.

The process whereby a single loan is tied to multiple funding sources. For example, a loan may be partially match-funded and partially tied to a variable rate.
 

From the borrower's perspective, the spread is the additional rate of interest added to a base rate to provide the All-In- Rate. From the bank's perspective, it is the
difference between the bank's cost of funds and the All-In-Rate.
 

A financial instrument issued by the bank for the account of one of the its clients on behalf of a beneficiary. Under the conditions negotiated between the client
and the beneficiary - which are stipulated in the SI3LC - the beneficiary can draw up to the full amount of the letter of credit at any time from its issuance until its
expiration. SBI,C s are.typically used to enhance the client's creditworthiness by augmenting it with the credit rating of the bank. It drawn upon, the client is
obligated to the bank to repay the funds. This repayment can be accomplished by the client making a direct payment to the bank. More typically, the bank makes
a loan to the client for the amount of the drawing; such a loan is repaid in accordance with its terms. Fees on SBLC's are usually a percentage of the SBLC face amount per annum, payable quarterly, in arrears.
 

The usual paying instructions that an institution employs to transfer funds from one bank to another. The most common instructions are to transfer funds via Fed
Wire.
 

 1. The straight-line amortization of fee income under the guidelines of FASI3 91. The fee amount is amortized by dividing the amount due by the number of days
   between the start date and the due date. (See also Interest-Method Amortization.)

2. The repayment of principal under a term loan in equal, regularly scheduled installments over the life of the loan.
 

A ledger maintained by a department containing a finer breakdown of certain accounting entries than what appears in the general ledger.
 

A limit within a facility to restrict or accommodate certain types of activity. For example, a $5 million facility may restrict direct borrowings to no more than $3
million and letters of credit to no more than $2,5 million. While the sum of the sublimits may exceed the total amount of the facility, total outstandings under
them may not.
 

A line of credit for very short term working capital needs made available to the borrower(s) by the agent bank in connection with a working capital revolving credit
facility. This line generally expires at the same time as the revolver; however, borrowings under it arc generally priced at a more favorable rate. The credit agree-
ment stipulates that the amount borrowed must be repaid within a certain number of days (e.g. overnight, three days, etc.). If the loan is not repaid at such time, it is included in the revolving credit's pro- rated outstandings amongst the primary banks, and reverts to the higher pricing in the main facility. The sum of swingline borrowings and revolving credit borrowings cannot exceed the total revolving credit commitment.
 

The group of banks or financial institutions that enter into a credit arrangement with a borrower. Usually one of the banks in the syndicate acts as the agent for the 
others.
 

The process by which one or more lenders sell down their initial commitments/exposures. A syndication generally has two phases a primary phase and a secondary
phase. The primary phase ends with the signing of the credit agreement. The secondary phase consists of each primary lender selling off parts of its commitment to
secondary investors.
 

A one-time fee paid by the borrower to the bank group in consideration for its commitment to finance a transaction. This fee is usually a percentage of the
commitment amount and is usually paid upon completion of the syndication or when the credit agreement is signed. (Also referred to as an Arrange- ment Fee,
 Closing Fee, Commitment Fee, Origination Fee, and Upfront Fee)