Reporting of the commitment amount at inception for instruments under limit structures

Question

There appear to be inconsistencies between Parts II and III of the AnaCredit Reporting Manual regarding the reporting of the commitment amount at inception for instruments drawn under limit structures. Section 3.4.21 of Part II of the Manual states that “for multiple instruments drawn under the so-called limit structures, the commitment amount at inception is allocated to each such instrument according to allocation logic of the reporting agent”.

Additionally, it is stated that “for more details regarding reporting multiple instruments arising under a multi-instrument credit facility, refer to Part III of the Manual, which deals specifically with this subject”.

However, in Section 3.4.1 of Part III of the Manual, a distinction is made between lump sum loans and instruments which are not lump sum loans, and yet there is no allocation in this regard. Therefore clarification is required as to when, if at all, an allocation of the amount takes place.

Answer

Part III of the AnaCredit Manual takes precedence with regard to multiple instruments drawn under the so-called limit structures.

To that extent, the above-mentioned “allocation”, as mentioned to in Section 3.4.21 of Part II of the AnaCredit Manual, should be understood as referring to the different clarifications regarding the reporting of the attribute “commitment amount at inception”.

This means that in line with the provisions of Part III of the AnaCredit Reporting Manual:

  • the commitment amount at inception for lump-sum loans under the cross-limit is the amount of funding disbursed. Such instruments do not have an off-balance-sheet amount
  • for instruments under the cross-limit that are not lump-sum loans (irrespective of whether they are of a revolving nature), the commitment amount at inception is reported as “Non-applicable”. Such instruments typically have an off-balance-sheet amount.

The concept of “according to allocation logic of the reporting agent” from the Part II of the AnaCredit Reporting Manual is meant to refer to the allocation of the off-balance-sheet amount as clarified in Section 3.4.3 of Part III of the AnaCredit Manual rather than the commitment amount at inception.

Related questions

See also Off-balance-sheet items in the scope of AnaCredit, Allocating off-balance-sheet amounts to instruments that do not comprise an undrawn amount, Treatment of credit limit denominated in a currency other than the currency of the instrument, Multi-product credit facilities with no specific credit sub-limits, Commitment amount at inception and off-balance-sheet amount for cross-limits

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