Credit facilities have many ongoing performance obligations and delivery requirements that the borrower must meet on a timely basis.

Managing Credit Facilities Frequent Performance Obligations and Delivery Requirements

These lending arrangements require the borrower’s frequent attention, whether to request and repay loans or to deliver periodic and event-driven obligations. Using a manual process to manage these credit facilities increases the risk of missing an obligation, resulting in a technical default. Furthermore, a manual process requires more time and resources from the borrower and may not ensure compliance.

Instead, a software solution that tracks and reminds the borrower of its obligations ensures compliance with the loan terms and reduces the borrower’s time and resources needed to manage the credit facility.

Obligations in Credit Facilities

The borrower’s obligations in credit facilities are numerous and frequent, ranging from daily to annually, and include:

• Loan Terms: Selecting the interest rate and duration of each loan, paying fees, maintaining the loan-to-value ratio.
• Payment Obligations: Periodic interest payments and amortization of principal payments, voluntary and mandatory prepayments, including from the sale of collateral.
• Events of Default: Failure to make a payment or perform any other non-payment obligation.
• Affirmative Covenants: Periodic financial reporting, delivery of compliance certificates and borrowing base certificates, notices related to the financial health of the borrower and changes that impact the borrower or the loan collateral.
• Negative Covenants: Monitoring negative pledge of loan collateral, restrictions on strategic initiatives by borrower and the incurrence of debt, limitations on distribution of borrower’s assets.

Automating Compliance with Software Solutions

Given the abundance and frequency of obligations, utilizing a software solution can be a game-changer. Quadrangle, through its QDS Platform, breaks down the loan term-by-term, including the deadlines, deliverables and all other action items in your credit facilities. The QDS Platform integrates with your calendar, allowing all action items to be tasked and notified to the appropriate departments and individuals and linked directly to underlying forms, exhibits, and other required deliverables.

Clients can compare and track their credit facilities term-by-term, designate responsibilities between team members, and meet all required deadlines. The QDS Platform software tools, including Task Manager, Term-by-Term Reports, Document Library, Virtual Data Room, and Notification Center, ensure compliance with these credit facilities obligations, while enabling firms to efficiently manage these facilities. In addition, Quadrangle’s subject matter experts are available to support you.

Contact us to learn more about how Quadrangle and QDS can help you automate your credit facilities deadlines and deliverables.