Evidence
The Evidence (Covenant and Conditions) Property Class refers to conditions, which a borrower must comply with to avail a Facility or a Loan. A Covenant must be valid throughout the life of an Arrangement (for example, Deal or Facility) and it must be validated on a certain frequency. A Condition must be true for certain activities to occur.
Conditions are classified as two categories:
- Conditions precedent - Must hold true to grant a credit agreement, that is, during origination.
- Conditions subsequent - Must be adhered to after the agreement is live. For example, Condition to fund.
Examples of some of conditions are:
- Not take on additional debt
- Maintain an LTV <= 80%
- Pay Taxes on time
- Pay employees, on time
- Maintain a Debt Service Ratio < 0.25
- Maintain Risk Rating of, say, A or above
Product Lines
The following Product Lines use the Evidence Property Class:
- Asset Finance
- Facility
- Lending
Property Class Type
The Evidence Property Class (optional) uses the following Property Class types:
- Dated
- Tracking
Balance Prefix
The Evidence Property Class is not associated with any balance prefix and suffix.
Attributes
The following are the attributes in Evidence Property Class:
Category
Specifies the condition category. Vetting from EV.REQUIREMENT.CATEGORY (virtual table) Examples of Evidence are,
- Financials
- Tax
- Legal
- Compliance
- Pledge
Type
Specifies the covenant that needs to be complied with. Lists the requirement from EV.EVIDENCE.REQUIREMENT table filtered with Periodic Requirement set as Yes.
Related
Specifies the related covenants of Related Requirement type. List of related requirements are based on the COVENANT.EVIDENCE selected.
Operand
Specifies the operand for the compliance rule of the related requirement.
Value
Specifies the compliance rule value to be compared with the evidence data element.
Start From
Specifies the start date from which a requirement needs to be tracked. Field should have calendar and the system date should be highlighted.
Due Every
Specifies the recurrent frequency that the condition needs to comply with.
Consequence
Specifies the consequence if conditions are not met. It is linked to AA.ACTION table. Allowed option is ‘Restrict’.
Category
Specifies the Condition category. Vetting from EV.REQUIREMENT.CATEGORY (virtual table) Examples of Evidence are,
- Financials
- Tax
- Legal
- Compliance
- Pledge
Type
Specifies the Conditions that needs to be complied with upon performing an activity. For example, New Offer and New Facility. It lists valid records of the EV.EVIDENCE.REQUIREMENT table filtered with Periodic Requirement as blank. If Condition evidence is defined, the system defaults the Condition category if the user does not update this field. Else, Temenos Transact raises an error message.
Due On
Specifies the events during which a new instance of the requirement needs to comply with. Allowed values are,
- New Offer (subject to development)
- New Facility
- New Drawdown
Consequence
Specifies the consequence if Conditions are not met. It is linked to AA.ACTION. Allowed option is ‘Restrict Drawdown’.
Periodic Attribute Classes
The Evidence Property Class is not associated with any periodic attribute class.
Actions
The Evidence Property Class supports the following actions:
| Action Name | Description |
|---|---|
| EVIDENCE | Individual AA.PROPERTY.CLASS.ACTION records control which Product Line it’s associated to. The Evidence Property Class supports the EVIDENCE action. |
Accounting Events
The Evidence Property Class does not perform any actions that generate accounting events.
Limits Interaction
The Evidence Property Class does not perform any action that impact the limits system.
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