The Depository Trust & Clearing Corporation (DTCC) launches its Loan/SERV Reconciliation Service that will help automate and streamline the processing of syndicated commercial loans by enabling agent banks and lenders to view and reconcile loan positions on a daily basis.
The service went into full production this week when Citi, an agent bank, began sending its loan data to DTCC. The data includes details of commitment balances for each lender in each facility as well as transactions that change those balances such as assignments or commitment reductions. The Reconciliation Service enables lenders to submit and reconcile their loan transaction and position records against those of the agent or view and download the agent information for their own processing.
This is a giant step for the global syndicated loan market because it will help provide the loan industry with an industry-wide automated facility to reconcile balances daily, says Atilla Karasapan, managing director, Citi. By making sure that both the agent and lender are on the same page, the service will help ensure accurate and timely servicing of loans.
With the Loan/SERV Reconciliation Service, lenders submit transactions and position balances to DTCC, says Christopher Childs, DTCC vice president, global loans product management. DTCC then compares the data against the agent submission and, via a Web interface, displays the differences online for both the agent and lender. The system allows agents and lenders to highlight the erroneous records and communicate with one another on a solution. System security means that lenders can only view records that relate to their loan transactions and positions.
For lenders who do not want the full reconciliation service, Loan/SERV offers position reporting where a lender can view the agent position records and transactions online and notify the agent whether they agree or disagree with the current position.
D.C.