Create a Construction Loan

A construction loan is a specialized loan in which the principal is not drawn at the start date but can be drawn at any time during the term to maturity of the loan. The principal actually constitutes the limit of the total drawing.

In Fairways Debt, the drawn amount is repaid entirely at the maturity date.

 

Navigate to the Debt & Derivatives Application
  1. Log in to your Fairways Debt account, e.g. https://login.financeactive.eu/.
  2. Select a customer account.
  3. Navigate to Applications Applications.png > Debt & Derivatives.
Create a Construction Loan
  1. Click Add Transaction > Loan > Construction Loan.

DebtDerivatives_Portfolio_AddTransaction_Loan_EN.png

  1. Complete the form with all relevant details.

Note: Fields marked with an asterisk * are mandatory.

Field Description
Reference Code

Unique reference of the transaction. Identifies the transaction in the portfolio.

Note: The reference must be unique among all the entities managed in the account.

External Reference Code Used by external systems to identify the transaction. Used when transactions are imported from or exported to another system.
Principal Limit of the total drawing.
Currency Currency of the principal amount.
Borrower

Borrowing entity in the system.

Note: Only entities in the current organization can be managed by the current user.

Lender Can be either internal (an entity in the system) or external (a commercial bank).

Transaction_EN.png

Field Description
Trade Date Date at which the transaction has been traded. From that date, the system takes the transaction into account as an item of the portfolio.
Start Date Unadjusted start date of the transaction.
Maturity Date Unadjusted maturity date of the transaction.
First Roll Date Unadjusted date of the first payment.

Dates_EN.png

Field Description
Index

Name of the index used to calculate the rate value.

Note: The field beside displays depending on the index selected.

Initial Interest Rate

Note: This field displays depending on the index selected.

Initial rate of the custom index.

Spread

Note: This field displays depending on the index selected.

Spread (or margin) value in percentage.

Day Count Convention Used to compute the day fraction of an interest accrual period.
Capitalized Interest Defines whether the interest amount should be paid at the payment date, or added to the principal (and included into the outstanding balance for the following periods).

Indexation_EN.png

Field Description
Frequency Frequency of the payments.
Interest Calculation Adjustment Adjustment mode for the interest calculation. The nominal start and end dates of the accrual period will be adjusted accordingly before computing the interest amount.
Payment Date Adjustment Adjustment mode for the payment date.
Last Stub Period Defines whether the last period should be a short or long stub when it does not match the selected frequency. Short End Stub by default.

Payment_EN.png

  1. Enable Show Details after Validation to automatically open the new product profile once created.
  2. Click Apply to create the construction loan.

Loan_Construction_Create_EN.png

The new construction loan displays in the draft portfolio.

Loan_Construction_Created_EN.png

Adjustment

Adjustment modes define how the system rolls dates in case of holidays in the calendar.

Field Description
Unadjusted Not rolled.
Preceding Rolled to the previous business day.
Following Rolled to the next business day.
Modified Preceding Rolled to the previous business day, only if that day occurs in the same month. Otherwise, rolled to the next business day.
Modified Following Rolled to the next business day, only if that day occurs in the same month. Otherwise, rolled to the previous business day.
End of Month (unadjusted) Rolled to the last day of the month.
End of Month (preceding) Rolled to the last day of the month, then adjusted to the previous business day.
Modified Following (year)

Rolled to the next business day, only if that day occurs in the same year. Otherwise, rolled to the previous business day.

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