Contractual extensions are options agreed upon in the original agreement to increase the initial term to maturity of the transaction. In this case, the borrower requests the lender to exercise the extension option.
In Fairways Debt, contractual extensions are not active by default until they are converted to life cycle extensions.
From the Calendar application, you can track an upcoming contractual extension and enable the option. You can also enable the option directly from the transaction.
When the appropriate event notification is set for contractual extensions, you will receive an email notification from Fairways Debt to remind you of the upcoming effective date of a contractual extension. See Create the event notification for more information.
Note: Only users associated with a role that enables "Create Transactions" can enable a contractual extension option. Contact your Finance Active consultant for further information.
Prerequisites
- Extend a Standard Loan, a Cash Facility, a Credit Facility or a Credit Facility Drawing
- Move the transaction to the actual portfolio (only if the option is enabled from the Calendar application)
Enable a Contractual Extension Option from the Calendar Application
- Log in to your Fairways Debt account and select a customer account.
- Navigate to Applications
> Calendar.
- Define the calendar period and select the Contractual Extensions general event type to navigate to the relevant event.
- Click the event either on the planning area or on the Upcoming Events panel to view the detail on a dedicated popup window.
- Click Enable Option in the upper part of the popup window.
- Click the link on the confirmation message to view your action on the transaction.
As a result, the option is converted to a life cycle extension on the transaction's 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.
Enable a Contractual Extension Option from the Transaction
- Log in to your Fairways Debt account and select a customer account.
- Navigate to Applications
- 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. - From the Contractual Extensions side panel, click Enable to enable the corresponding option.
- Click Apply on the confirmation message.
As a result, the option is converted to a life cycle extension on the transaction's 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 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.