refinancing - Refinance Standard Loans

Updated June 29, 2020 14:12

In Fairways Debt, you can refinance standard loans: fully repay the original transaction, which will be refinanced with a new one, for example with a better rate.

<standardLoan>
 <refinancing>
  <tradeDate> ... </tradeDate>
  <referenceDate> ... </referenceDate>
  <refinancedByReference> ... </refinancedByReference>
  <repaymentType> ... </repaymentType>
  <prepaymentPenalties> ... </prepaymentPenalties>
  <refinancePrepaymentPenalties> ... </refinancePrepaymentPenalties>
 </refinancing>
</standardLoan>

Tag	Item		Description
refinancing	Main	Mandatory	Rules to apply for refinancing a transaction.
tradeDate	Secondary	Mandatory	Date at which the transaction has been agreed for refinancing.
referenceDate	Secondary	Mandatory	New maturity date of the refinanced transaction.
refinancedByReference	Secondary	Mandatory	Reference of the refinancing transaction.
repaymentType	Secondary	Mandatory	Impacts how cash flow reports display.
prepaymentPenalties	Secondary	Optional	Amount of the fees paid for the repayment.
refinancePrepaymentPenalties	Secondary	Optional	Include/Exclude the penalties in/from the refinancing transaction.

To refinance a transaction:

Add the <refinancing> tags in the <standardLoan> tags of the refinanced transaction.

<standardLoan>
 <refinancing>
 </refinancing>
</standardLoan>

Add the <tradeDate> tags in the <refinancing> tags.
Enter the refinancing trade date in the YYYY-MM-DD format (year-month-day) in the <tradeDate> tags.

Note: The refinancing trade date must be equal or later than the trade date of the transaction to refinance.

In this example, we enter 2020-06-01, i.e. 1 June 2020.

<standardLoan>
 <refinancing>
  <tradeDate>2020-06-01</tradeDate>
 </refinancing>
</standardLoan>

Add the <referenceDate> tags in the <refinancing> tags.
Enter the reference date in the YYYY-MM-DD (year-month-day) format in the <referenceDate> tags.

Note: The reference date must be equal or later than the refinancing trade date.

In this example, we enter 2020-06-01, i.e. 1 June 2020.

<standardLoan>
 <refinancing>
  <tradeDate>2020-06-01</tradeDate>
  <referenceDate>2020-06-01</referenceDate>
 </refinancing>
</standardLoan>

Add the <refinancedByReference> tags in the <refinancing> tags.
Enter the reference of the refinancing transaction.

Note: In the interface, the refinancing transaction is automatically created based on the refinanced transaction. However, using XML, you must also create the refinancing transaction.

In this example, we enter 9004.

<standardLoan>
 <refinancing>
  <tradeDate>2020-06-01</tradeDate>
  <referenceDate>2020-06-01</referenceDate>
  <refinancedByReference>9004</refinancedByReference>
 </refinancing>
</standardLoan>

Add the <repaymentType> tags in the <refinancing> tags.
Enter a repayment type.

Repayment Type	Content Name
Full with cash flows: All movements display in cash flow reports, i.e. the repayment and penalty fee (if relevant) of the refinanced transaction and the new drawing of the refinancing transaction.	REPAYMENT_FULL_WITH_CASH_FLOWS
Full without cash flows: Only the last payment and the penalty fee (if relevant) of the refinanced transaction displays in cash flow reports.	REPAYMENT_FULL_WITHOUT_CASH_FLOWS

In this example, we enter REPAYMENT_FULL_WITH_CASH_FLOWS.

<standardLoan>
 <refinancing>
  <tradeDate>2020-06-01</tradeDate>
  <referenceDate>2020-06-01</referenceDate>
  <refinancedByReference>9004</refinancedByReference>
  <repaymentType>REPAYMENT_FULL_WITH_CASH_FLOWS</repaymentType>
 </refinancing>
</standardLoan>

Add the <prepaymentPenalties> tags in the <refinancing> tags, if relevant.
Enter the penalty amount.

Note: Use a full stop to separate units from decimals.

In this example, we enter 1000.50.

<standardLoan>
 <refinancing>
  <tradeDate>2020-06-01</tradeDate>
  <referenceDate>2020-06-01</referenceDate>
  <refinancedByReference>9004</refinancedByReference>
  <repaymentType>REPAYMENT_FULL_WITH_CASH_FLOWS</repaymentType>
  <prepaymentPenalties>1000.50</prepaymentPenalties>
 </refinancing>
</standardLoan>

Add the <refinancePrepaymentPenalties> tags in the <refinancing> tags, if relevant.
Enter:
1. true to include the penalties in the refinancing transaction.
2. false to exclude the penalties from the refinancing transaction.

Note: If the penalties are included in the refinancing transaction, then the penalty fee drawing displays in the cash flow reports, even for the type without cash flows.

In this example, we enter true.

<standardLoan>
 <refinancing>
  <tradeDate>2020-06-01</tradeDate>
  <referenceDate>2020-06-01</referenceDate>
  <refinancedByReference>9004</refinancedByReference>
  <repaymentType>REPAYMENT_FULL_WITH_CASH_FLOWS</repaymentType>
  <prepaymentPenalties>1000.50</prepaymentPenalties>
  <refinancePrepaymentPenalties>true</refinancePrepaymentPenalties>
 </refinancing>
</standardLoan>

The refinanced transaction matures with two life events: the repayment and the refinancing.

The refinancing transaction is associated with the refinanced transaction.