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Deal, facility and outstanding hierarchy

Build a clear mental model of how borrower relationships, agreements, facilities and active loans connect.

Purpose

Understand where contractual terms, limits and transaction-level details logically belong before working with a servicing record.

Before you begin

Prerequisites

  • Basic knowledge of commercial loan parties
  • Awareness of commitment, availability and outstanding principal
  • Access only to an employer-authorized training or production environment

Operational sequence

Workflow and validations

01

Start with the agreement

Identify the overall borrower relationship and common contractual structure.

Control check: Confirm the correct legal borrower and agreement reference.
02

Locate the facility

Connect product type, currency, commitment, dates and pricing rules to the correct facility.

Control check: Verify the facility matches the approved product and limit.
03

Review active outstandings

See individual funded or contingent transactions using the facility.

Control check: Outstanding amounts plus remaining availability align to the facility position.
04

Trace related events

Connect repricing, payment, fee or amendment activity to the appropriate level.

Control check: The event updates the intended record without changing unrelated positions.

Troubleshooting

Common breaks and response

Activity appears under the wrong facility

Likely cause

Similar facility names, currencies or borrower entities were not distinguished.

Controlled response

Stop processing, verify legal and credit references, then route correction through approved controls.

Availability does not match expectation

Likely cause

An outstanding, sublimit, commitment change or pending activity is missing from the review.

Controlled response

Reconcile facility commitment, usage and pending transactions before accepting new activity.

Connected impact

Downstream effects

  • Availability and exposure reporting
  • Interest and fee accruals
  • Borrower and lender notices
  • Accounting and regulatory feeds

Control record

Audit evidence

  • Approved facility terms
  • Executed agreement reference
  • Maker-checker approval
  • Position or availability reconciliation

Practical context

Scenario: two facilities under one agreement

A borrower has a USD revolving facility and a EUR term facility. A request must be matched to the correct currency, product, limit and transaction population before any servicing action is prepared.

Knowledge check

Check your understanding

Why should an operator identify the correct hierarchy level before making a change?Show answer
A term stored at agreement or facility level can affect many transactions, while an outstanding-level change should be narrower. Selecting the wrong level can create widespread position, accrual or reporting errors.

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Drawdown workflow and validations

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