Borrowers may request to extend their current loans rather than negotiating new loans. Loan extensions are part of the transaction lifecycle.
Extensions can be managed at two different levels in Fairways Debt, which are the following:
- Contractual extensions: These are options agreed upon in the original agreement. In this case, the borrower requests the lender to exercise the extension option. The agreement may include a notice period. Contractual extensions are not active by default in Fairways Debt until they are converted to life cycle extensions.
- Life cycle extensions: These can be created from contractual extensions after the option has been exercised or these are non-contractual extensions that are negotiated directly between the borrower and the lender.
In Fairways Debt, extensions increase the initial term to maturity of the transaction. You can extend a transaction at any time during its term to maturity.
Notes:
- These extensions only apply to standard loans, cash facilities, credit facilities and their drawings with bullet, custom or extended constant annuity amortization. They are also available for credit facilities with straight line amortization type set as a default value for drawings.
- When a new amortization type is selected for a standard loan, it must be compatible with the existing extensions.
Navigate to the Debt & Derivatives Application
- Log in to your Fairways Debt account.
- Select a customer account.
- Navigate to Applications
> Debt & Derivatives.
Add a Contractual Extension to a Standard Loan, a Cash Facility, a Credit Facility or a Credit Facility Drawing
- In the draft portfolio, open either a standard loan, a cash facility, a credit facility or a credit facility drawing with bullet, custom or extended constant annuity amortization.
- Click the Contractual Extensions icon
.
Note: A badge on the icon indicates the number of existing contractual extensions. - Click Add Contractual Extension in the Contractual Extensions side panel.
- Complete the form with all relevant details.
Note: Fields marked with an asterisk * are mandatory.
| Field | Description |
|---|---|
| Effective Date |
Date from which the new extension takes place. Note: This date must be equal to or later than the transaction start date and earlier than the adjusted maturity date, which is calculated based on the most recent extension and calendar adjustments. |
| Extended Maturity Date |
New maturity date of the transaction. Notes:
|
- Click Apply.
The contractual extension displays in the side panel.
The next extension effective date displays in the Time Frame panel on the Overview tab. If needed, click the magnifying glass icon to view the list of the existing contractual extensions.
You will also be able to enable the option from the Contractual Extensions side panel on the transaction, or track this extension and enable the option from the Calendar application. See Enable a Contractual Extension Option for more information.
Notes:
- If there is more than one extension defined for the transaction in the Contractual Extensions side panel, only the most recent one can be either edited or deleted from this panel.
- If an enabled extension is deleted from the Life Cycle tab, it will then be possible to enable the option again in the Contractual Extensions side panel on the transaction.
- If the transaction is moved to the draft portfolio with an extension, then it will not be possible to edit the start date, the maturity date and the end of availability period.
Add a Life Cycle Extension to a Standard Loan, a Cash Facility, a Credit Facility or a Credit Facility Drawing
- Open either a standard loan, a cash facility, a credit facility or a credit facility drawing with bullet, custom or extended constant annuity amortization.
- Navigate to Life Cycle.
- Click Extend.
- Complete the form with all relevant details.
Note: Fields marked with an asterisk * are mandatory.
| Field | Description |
|---|---|
| Trade Date |
Date at which the extension has been agreed. Note: This date must be equal to or later than the transaction trade date. |
| Effective Date |
Date from which the new extension takes place. Note: This date must be equal to or later than the transaction start date and earlier than the adjusted maturity date, which is calculated based on the most recent extension and calendar adjustments. |
| Extended Maturity Date |
New maturity date of the transaction. When the effective date is reached, the transaction maturity date is updated to reflect the extended maturity date, considering any adjustments on that date. Notes:
|
| Verbiage |
Comments and details related to the extension. |
- Click Apply.
The extension displays in the Life Cycle tab.
When the effective date is reached:
- The extension is at the "Effective" status on the Life Cycle tab.
- The transaction maturity date is updated to reflect the new extended maturity date, considering any adjustments on that date.
- The Time Frame panel and schedule on the Overview tab are then automatically updated accordingly.
Notes:
- If there is more than one extension defined for the transaction on the Life Cycle tab, only the most recent one can be deleted.
- If an extension is deleted from the Life Cycle tab after the effective date, the transaction maturity date is updated to reflect the maturity date prior to the extension.
- If the transaction is moved to the draft portfolio with an extension, then it will not be possible to edit the start date, the maturity date and the end of availability period.