Clarification concerning repayment rights

Question

Could you please clarify which value to report in the data attribute “repayment rights” in cases where the credit line is exceeded or if there are amounts due?

Answer

The data attribute “repayment rights” indicates if the creditor may or may not claim the repayment of the instrument “on demand or short notice”. As a general rule, the data attribute does not concern just a part of the current balance outstanding, but rather it covers the right to use the instrument as a whole.

Consequently, the value “other”, rather than “on demand or short notice”, is reported even if an instrument is in excess of the assigned credit limit and where the excess alone may be claimed payable on demand, provided that the instrument which is considered as a whole is not immediately payable (depending on the contractual agreement, such an excess may be a breach of covenant rendering the instrument immediately payable).

In the same vein, the data attribute “repayment rights” is not necessarily changed to “on demand or short notice” even if an amount under the instrument becomes due, unless the instrument’s being past due implies that the instrument as a whole is contractually cancelled and becomes immediately payable (in accordance with the contractual agreement, the lack of payment may be considered a breach of covenant resulting in the instrument’s becoming repayable “on demand or short notice”).

However, as regards debit balances on current accounts without an agreed credit limit (and similar balances), where typically the amounts are repayable as soon as they arise, the value “on demand or at short notice” is reported to AnaCredit because the outstanding debit balance is the whole instrument.

The paragraphs below provide an overview of the possible values of the data attribute by the type of instrument. Please note that this serves only as a general guideline and exceptions may be possible in practice, depending on actual contractual agreements.

  • The value “other” is typically reported in the data attribute “repayment rights” for “revolving credit other than overdrafts and credit card debt”, “credit lines other than revolving credit”, “financial leases” and “trade receivables” because, in principle, such instruments are neither claimable on demand, nor repayable by close of business on the day following that on which they were granted.
  • The value “on demand or short notice” is typically reported in the data attribute “repayment rights” for reverse repurchase agreements when they are repayable by close of business on the day following the trading date; otherwise, they are reported under the value “other”.
  • Regarding open reverse repurchase agreements (i.e. where no legal final maturity date is defined in the contract owing to the fact that they are of a perpetual nature) which can be terminated on any day after the trading date (by either party, provided the party gives notice before an agreed daily deadline), the value “on demand or short notice” is reported in the data attribute “repayment rights”, despite the fact that they roll over every day.

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