Committed Credit Facility Tranche

From Open Risk Manual


Committed Credit Facility Tranche. A contractually committed line of credit which is issued as a revolving line of credit which can be drawn upon and has collateral

Issues and Challenges

We now have it that all loans follow from a CommittedCredit Facility, but this may be transient. See notes on fees and Ts and Cs. See also FpML terms and elements on this. Apply to loan, draw-down generally (money market loan where we only see the actual lending). Is there also this feature in Money Markets, if you go straight to the market and they assess you on the spot? They have simply done the same kind of assessment. So maybe the concept of transient Cr facility tranche does not apply in that instance. There need be no firm commitment until the instrument is bought off you, at which point you have the capital. So this is where money markets and loans part company. Lending departments: create facility Money markets: deliver the money.


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