DMFAS 6 User's Guide PDF

DMFAS
DMFAS 66User's Guide

User's Guide
Concepts
Definitions
Instructions…
for smart users!
DMFAS 6 User’s Guide
This is not an official UNCTAD document.
This document describes core DMFAS features available in DMFAS version 6, Release 1. Some
functionalities may not yet be implemented at this time. Accordingly, certain screen captures may
not be up-to-date. The content of this Guide is furnished for informational use only and is subject to
change without notice.
The DMFAS Programme does not guarantee that it is error-free. Material in this publication may be
freely quoted or reprinted provided a reference to the document is given.
Copyright © DMFAS Programme, May 2015.
All rights reserved.

1
Contents
About this Guide
PART 1 GETTING STARTED 15
Chapter 1 An Introduction to DMFAS 6 17
About DMFAS .......................................................................................................................19

What is DMFAS 6? .............................................................................................................................. 19
Why a new version? ............................................................................................................................. 19
A powerful and easy-to-use application .............................................................................................. 19
Robust debt management capabilities ................................................................................................... 20
Quick projection and analytical capabilities .......................................................................................... 20
What’s new in version 6? .....................................................................................................21
The scope of the new version .............................................................................................................. 21
Technical characteristics of DMFAS 6 ................................................................................................... 25
The DMFAS helpdesk ...........................................................................................................27
Chapter 2 The Basics of DMFAS 29
Overview ..............................................................................................................................31
The DMFAS 6 Portal ..............................................................................................................31
What’s in the Portal? ........................................................................................................................... 31
The different areas of the Portal .......................................................................................................... 31
Logging in to the Portal ....................................................................................................................... 33
How to access the DMFAS modules ..................................................................................................... 33
The DMFAS 6 modules on the Portal ....................................................................................34
Negotiation ........................................................................................................................................ 34
Administration .................................................................................................................................... 34
Mobilization ........................................................................................................................................ 35
Debt service ........................................................................................................................................ 35
Reports ............................................................................................................................................... 35
Analysis .............................................................................................................................................. 36
The DMFAS 6 interface ........................................................................................................37
The left panel, windows and tabs ....................................................................................................... 37
Fields .................................................................................................................................................. 38
Integrated calculator ............................................................................................................................ 38
How to enter data ................................................................................................................................ 39
Saving data ......................................................................................................................................... 40
How DMFAS 6 validates data .............................................................................................................. 40
How to delete data in DMFAS 6 .......................................................................................................... 40
Attaching files ..................................................................................................................................... 41
Recording notes .................................................................................................................................. 41
The Search facility ............................................................................................................................... 42
The working modes in DMFAS 6 .......................................................................................................... 47
Changing skins, date formats and language ........................................................................................ 48
2
Chapter 3 Recording Historical Data and Operations 49
About Historical Data and Operations ...................................................................................51

What are historical data and operations in DMFAS? .............................................................................. 51
How to record a loan’s historical data ................................................................................................. 51
About Historical Drawings .....................................................................................................52
Where to record historical drawings ..................................................................................................... 52
Record detailed or aggregate data? ...................................................................................................... 52
About Historical Debt Service and Commissions ....................................................................53
How to access historical debt service .................................................................................................... 53
Historical balances and the cut-off date ............................................................................................... 53
Historical debt service is recorded at the tranche level ........................................................................... 54
Amounts in local currency .................................................................................................................... 55
Using the Historical Debt Service window ..............................................................................56
The structure of the window ................................................................................................................ 56
Chapter 4 Recording and Maintaining Reference Files 57
About Reference Files ...........................................................................................................59

What are reference files? .................................................................................................................... 59
Why you should begin with reference files ........................................................................................... 59
How to access reference files ............................................................................................................... 59
The Participant reference file ................................................................................................60
How the window is organized .............................................................................................................. 60
The Basic Info tab ................................................................................................................................ 60
The Contact Information tab ................................................................................................................ 61
The User Info tab ................................................................................................................................ 61
The Notes tab ...................................................................................................................................... 61
Bank Accounts ......................................................................................................................62
The Bank Accounts Information tab ..................................................................................................... 62
The User Info tab ................................................................................................................................ 62
The Notes tab ...................................................................................................................................... 62
Exchange Rates ....................................................................................................................63
Methods for entering exchange rates ................................................................................................... 63
How often should exchange rates be entered? ..................................................................................... 64
Which currencies should be entered? .................................................................................................. 64
The automatic downloading of exchange rates from the Internet .......................................................... 64
How to enter several values for the same exchange rate ...................................................................... 65
How to correct an exchange rate ......................................................................................................... 65
Where to get exchange rates ............................................................................................................... 65
Common Interest Rates .........................................................................................................66
Floating interest rates and base rates ................................................................................................... 66
Why “common rates”? .......................................................................................................................... 66
Creation of specific interest rates used by some creditors ...................................................................... 66
Budget Lines .........................................................................................................................67
What are budget lines? ........................................................................................................................ 67
Which institutions will use the budget lines facility? ............................................................................... 67
Budget lines and debt service ............................................................................................................... 67
When do you record budget lines? ....................................................................................................... 67
Discount Rates ......................................................................................................................68
Maturity Groups ....................................................................................................................68
Interest Rate Groups ............................................................................................................69
3
Euro National Currency Units ................................................................................................69

Funds ...................................................................................................................................70
Historical Exchange Rates ......................................................................................................70
What are historical exchange rates? ..................................................................................................... 70
How are they calculated? ..................................................................................................................... 70
Indexes .................................................................................................................................71
Projects ................................................................................................................................71
PART 2 REGISTERING FRAME AGREEMENTS 73
Chapter 5 Registering General Agreements 75
About the General Agreements module ................................................................................77

How to access general agreements ...................................................................................................... 77
What is a general agreement? ............................................................................................................. 77
Revolving general agreements ............................................................................................................ 78
How the window is organized ............................................................................................................... 79
PART 3 REGISTERING LOANS 81
Chapter 6 An Introduction to Loans 83
The concept of loans and tranches ........................................................................................85

DMFAS options for managing loan tranches .........................................................................85
How to choose between tranche management options 2 or 3 ............................................................... 89
About currency pool loans ...................................................................................................91
What is a currency pool? ...................................................................................................................... 91
What is a currency pool loan? .............................................................................................................. 91
How DMFAS handles currency and non-currency pool loans ................................................................. 91
About syndicated loans ........................................................................................................92
Chapter 7 Registering Loan Agreements 95
About the Loans module .....................................................................................................97

How to access ..................................................................................................................................... 97
The General Information window ..........................................................................................98
The Agreement Info 1 tab .................................................................................................................. 98
The Agreement Info 2 tab ................................................................................................................. 100
The Participants tab ........................................................................................................................... 103
The User Info tab .............................................................................................................................. 103
The Other Classifications tab ............................................................................................................. 103
The Notes tab ................................................................................................................................... 103
The Attachments tab ......................................................................................................................... 103
About tranches ..................................................................................................................104
How to access tranches ...................................................................................................................... 104
Where to get information for tranches ................................................................................................ 104
Action to be taken once tranches are recorded or modified ................................................................ 104
The Tranches window .........................................................................................................105
The Tranches Info tab ......................................................................................................................... 105
The Estimated Drawings tab ............................................................................................................... 106
The Principal tab ............................................................................................................................... 111
4
The Interest tab ................................................................................................................................. 114

Special case: “last-day” interest calculations ...................................................................................... 117
The amortization Table tab ................................................................................................................. 119
About Commissions ............................................................................................................120
How to access commissions ................................................................................................................ 120
Regular and irregular commissions .................................................................................................... 121
Instrument or tranche level commissions? ........................................................................................... 121
Commission types ............................................................................................................................. 122
Chapter 8 Registering Revolving Credit 125
About revolving credit .........................................................................................................127

What is revolving credit? ................................................................................................................... 127
DMFAS and revolving credit ............................................................................................................... 127
Setting up a revolving facility for a loan ...............................................................................128
Recording the loan’s general information ........................................................................................... 128
Recording the conditions of the revolving facility ................................................................................ 129
Recording the tranche information ...................................................................................................... 129
Recording estimated drawings, principal, interest and commissions ..................................................... 129
Recording real drawings ..................................................................................................................... 129
Recording real payments .................................................................................................................... 129
An example of revolving credit ...........................................................................................131
Case 1 - Fully repaid at the end date ................................................................................................. 131
Case 2 - The outstanding is less than the ceiling at the end date ....................................................... 132
Case 3 - The outstanding is equal to the ceiling at the end date ......................................................... 132
Chapter 9 Registering Local Government Debt Instruments 133
About local government debt .............................................................................................135

What is meant by “local government”? .............................................................................................. 135
The background of local government debt ......................................................................................... 135
DMFAS and local government debt ..................................................................................................... 135
Recording local government debt related to a fund facility .................................................137
Creating a fund ................................................................................................................................. 137
Recording the general information and tranche/series information ...................................................... 138
Selecting the fund(s) and specifying the fund usage ............................................................................ 138
Recording debt service operations ...................................................................................................... 138
PART 4 REGISTERING DEBT SECURITIES 139
Chapter 10 An Introduction to Debt Securities 141
About Debt Securities .........................................................................................................143

What are debt securities? .................................................................................................................. 143
How securities are represented .......................................................................................................... 143
The participants in an issue ............................................................................................................... 143
How securities are issued .................................................................................................................. 144
The securities market ........................................................................................................................ 145
External or domestic debt? ................................................................................................................. 145
Presentation of debt securities statistics .............................................................................................. 146
5
Chapter 11 Registering Debt Securities 147
About the Debt Securities module ....................................................................................... 149

The categories of instruments in the module ....................................................................................... 149
The coverage of bonds and notes ....................................................................................................... 150
How the windows are organized in DMFAS ......................................................................................... 151
The General Information window .......................................................................................153
The Characteristics tab ...................................................................................................................... 153
The User Info tab .............................................................................................................................. 155
The Notes tab ................................................................................................................................... 155
The Series window ..............................................................................................................156
The Series Info tab ............................................................................................................................ 156
The Participants tab............................................................................................................................ 157
The Subscription tab .......................................................................................................................... 158
The User Info tab ............................................................................................................................... 159
The Interest tab ................................................................................................................................. 162
The Amortization Table tab ................................................................................................................ 165
The Pricing tab ................................................................................................................................. 166
The Commissions window ...................................................................................................167
The Terms tab .................................................................................................................................... 167
Regular and irregular commissions ..................................................................................................... 168
Instrument or series level commissions? ............................................................................................. 168
Commission types .............................................................................................................................. 169
The Payment Schedule tab ................................................................................................................. 170
PART 5 REGISTERING ISLAMIC SECURITIES 171
Chapter 12 Registering Sukuk 173
About Sukuk .......................................................................................................................175

What are sukuk? ............................................................................................................................... 175
Salam sukuk ..................................................................................................................................... 175
Istisna’a sukuk .................................................................................................................................. 176
Ijara sukuk ........................................................................................................................................ 176
Mudabarah sukuk ............................................................................................................................. 176
Musharakah sukuk ............................................................................................................................ 177
Murabaha sukuk ............................................................................................................................... 177
Hybrid sukuk ..................................................................................................................................... 177
About the Sukuk module .....................................................................................................178
PART 6 REGISTERING NON-DEBT AGREEMENTS 181
Chapter 13 Registering Grants 183
About the Grants module ...................................................................................................185

How to access .................................................................................................................................... 185
What are grants? .............................................................................................................................. 185
How the windows are organized ........................................................................................................ 185
6
Chapter 14 Registering On-lent Loans 187
About the On-lent Loans module .......................................................................................189

How to access the module .................................................................................................................. 189
What is on-lending? ........................................................................................................................... 189
The on-lending mechanism ............................................................................................................... 190
Debt classification of the on-lending of borrowed funds ..................................................................... 191
How to use the windows of the module ............................................................................................. 191
PART 7 MOBILIZING FUNDS 193
Chapter 15 Recording Real Drawings on Loans 195
About the Loan Drawings module ......................................................................................197

How to access this module ................................................................................................................. 197
The Real Drawings on Loans window ................................................................................................. 197
The concept of drawings .................................................................................................................... 198
What happens when a real drawing is recorded? ................................................................................ 199
Prerequisites for recording a real drawing .......................................................................................... 199
Creating a tranche from the Real Drawings window ............................................................................ 199
How DMFAS calculates and checks amounts .......................................................................200
The automatic calculation of amounts ................................................................................................. 200
An automatic check for consistency in amounts ................................................................................... 200
How you should check amounts ..........................................................................................200
Loans with only one tranche ............................................................................................................... 200
Loans with known tranches ................................................................................................................ 201
Loans with unknown tranches ............................................................................................................. 201
How DMFAS manages the undisbursed amount .................................................................................. 201
Change a real drawing entered in the wrong tranche ......................................................................... 202
Change or correct the amount of a real drawing ................................................................................. 202
Correct an amount changing the exchange rates ................................................................................ 203
Correct a real drawing recorded in the wrong effected currency .......................................................... 203
Cancel the remaining undisbursed amount after recording the last drawing ........................................ 203
Where to get information on real drawings? ........................................................................203
Roll forward estimated drawings .........................................................................................204
Chapter 16 Recording Debt Security Subscriptions 205
About real subscriptions ......................................................................................................207

The concept of subscriptions ............................................................................................................... 207
What happens when a real subscription is recorded? ......................................................................... 207
Prerequisites for recording a real subscription ..................................................................................... 208
Chapter 17 Recording Real Drawings on Grants 209
About the Grant Real Drawings module .............................................................................211

How to access this module ................................................................................................................ 211
What is a real drawing? ..................................................................................................................... 211
What happens when a real drawing is recorded? ............................................................................... 212
Prerequisites for recording a real drawing ........................................................................................... 212
7
How DMFAS calculates and checks amounts ......................................................................213

How you should check amounts .........................................................................................213
Chapter 18 Recording Drawing Requests 215
About Drawing Requests ....................................................................................................217

Linking one drawing request to one real drawing ................................................................................ 217
Linking several drawing requests to one real drawing or
linking one drawing request to several real drawings ........................................................................ 217
The Drawing Requests window ............................................................................................218
PART 8 DEBT SERVICE 219
Chapter 19 Recording Budget Allocations 221
About budget allocations ....................................................................................................223

How to access budget period allocations ........................................................................................... 223
What is a budget allocation? ............................................................................................................. 223
How to use this window ..................................................................................................................... 224
Where to get more information ......................................................................................................... 224
Chapter 20 Recording Debt Service Operations 225
About the Debt Service Operations module ........................................................................227

How to access debt service operations ................................................................................................ 227
What is debt service? ......................................................................................................................... 227
What are debt service operations? ..................................................................................................... 227
The window of this module ................................................................................................................ 228
Support for HIPC and MDRI relief ...................................................................................................... 229
General recommendations for recording debt service operations ........................................................ 230
The Principal and Interest tab ..............................................................................................231
Scheduled debt service and actual debt service .................................................................................. 231
Processing scheduled payments .......................................................................................................... 232
The Commissions tab 235
Tolerance factor for commission operations ....................................................................................... 235
Processing scheduled payments ......................................................................................................... 236
The Late Interest tab .........................................................................................................236
The dialog boxes in this tab ................................................................................................................ 236
Chapter 21 Implementing Capitalized Interest 237
About capitalized interest ..................................................................................................239

What is capitalized interest? .............................................................................................................. 239
Simple and compound interest .......................................................................................................... 239
The data for capitalized interest ......................................................................................................... 239
The formula for calculating capitalized interest .................................................................................. 240
The phases for implementing capitalized interest in DMFAS ................................................................ 240
Recording the terms for capitalized interest ........................................................................241
Specifying a capitalization period ....................................................................................................... 241
Specifying how to handle capitalized interest ...................................................................................... 241
8
Calculating the capitalized interest schedule ........................................................................243

Checking the schedule ....................................................................................................................... 243
Applying capitalized interest ................................................................................................243
Selecting a capitalized interest schedule ............................................................................................. 243
Applying capitalized interest operations ............................................................................................. 243
The adjustment of the face value ........................................................................................................ 243
The creation of amendments ............................................................................................................. 243
The generation of real drawings ........................................................................................................ 244
Setting up partial capitalization ...........................................................................................244
Recording partial capitalization ........................................................................................................... 244
PART 9 REPORTS 245
Chapter 22 An Introduction to DMFAS 6 Reports 247
About this chapter ..............................................................................................................249

About the Reports module ..................................................................................................249
The importance of reports ................................................................................................................. 249
DMFAS libraries ................................................................................................................................ 249
Reports and security ........................................................................................................................... 250
The different tables/views of DMFAS ................................................................................................... 250
What’s new in reports ........................................................................................................251
The new menu structure of the Reports module ................................................................................... 251
Creating reports in other modules ...................................................................................................... 251
A new query tool ................................................................................................................................ 252
New output formats for reports ......................................................................................................... 252
Changes after a Closing Date ............................................................................................................ 253
The tables of aggregates ................................................................................................................... 254
The Sets Calculation menu .............................................................................................................. 254
New reports ...................................................................................................................................... 254
Summary of the reports available in DMFAS .......................................................................255
Standard reports ............................................................................................................................... 255
User-defined reports ......................................................................................................................... 256
Other reports .................................................................................................................................... 256
About this Guide
About
About this
this chapter
chapter
About theofloan
Contents thisinformation
guide
Loan classification
Intended audience
General information about the loan
Additional user documentation
Tranche
Where tomanagement
get more information on DMFAS 6
10 DMFAS 6 User’s Guide
Overview of this guide ..........................................................................................................11
Contents of this guide .......................................................................................................................... 11

How to use this guide ........................................................................................................................... 11
The structure of the guide ..................................................................................................................... 11
Intended audience ................................................................................................................12
User profile .......................................................................................................................................... 12

Prerequisite knowledge ........................................................................................................................ 12
Additional user documentation .............................................................................................12
Where to obtain more information on DMFAS 6 .................................................................................. 13

Overview of this guide 11
Overview of this guide

This guide is about version 6 of the DMFAS (Debt Management and Financial Analysis
System) software developed by UNCTAD. It explains how to manage debt and other finan-
cial instruments throughout the phases of their life cycle: registration, mobilization of funds
and debt service operations.
This guide covers the core functions of the software. Functions that are optional or considered
as non-core functions are described in separate documentation. For a complete list of all the
DMFAS 6 user documentation, see the final section in this chapter.
CONTENTS OF THIS GUIDE

Within this guide, you will find:
• Conceptual information on debt instruments, agreements and general debt manage-
ment issues
• General explanations on the DMFAS core functions with a brief description of the inter-
face. The detailed description of the interface including the windows, tabs, dialog
boxes and fields is found in the on-line help.
• Instructions on how to perform general and specific tasks such as how to create data in
a grid, how to carry out debt service operations and how to set up capitalized interest
HOW TO USE THIS GUIDE

The DMFAS 6 User’s Guide is meant to be used in parallel with the Debt and DMFAS Glossary,
which defines a number of financial, technical terms and codes used in DMFAS.
This guide is not intended to be exhaustive or serve as a tutorial. It is meant to complement
and support the DMFAS training provided by DMFAS consultants and staff.
THE STRUCTURE OF TH E GUIDE

This guide is made up of 22 chapters divided into 9 parts.
• Part 1, Getting Started, introduces DMFAS 6, the basics of the system, historical data
and operations as well as reference files.
• Part 2 focuses on general agreements.
• Part 3 explains how to register loans while providing additional information on
revolving credits and local government debt.
• Part 4 deals with the registration of short- to long-term debt securities including spe-
cific instruments falling in the categories of money market instruments, bonds and
notes as well as promissory notes.
• Part 5 presents the registration of sukuk or Islamic instruments in DMFAS 6.
• Part 6 relates to non-debt agreements, specifically grants and on-lent loans.
• Part 7 covers the mobilization of funds: the real drawings of loans or grants as well as
real subscriptions.
• Part 8 provides information on all aspects of debt service operations on principal, inter-
est, commissions and late interest.
• Part 9 summarizes the Reports module which is also the subject of the documentation
supplement entitled DMFAS 6 Reports.
Intended audience
US ER PROF ILE
This guide is intended for all users of DMFAS 6.
PREREQU IS ITE KNOW LEDGE

The prerequisite knowledge for working with DMFAS is explained below.
For all users

For all users, the DMFAS Programme requires proficiency in the Microsoft operating system
as well as a knowledge of Internet Explorer or other standard browser since DMFAS 6 is a
web-based application. It also encourages a good knowledge of other Microsoft Office
applications such as Word or Excel.
For debt officers

For users who are debt officers, this guide assumes the ability to interpret a debt agreement. It
also requires familiarity with debt management concepts such as debt instruments or debt
service operations.
Additional user documentation

The DMFAS modules and features that are not included in this guide are covered in the docu-
ments listed below.
DMFAS 6 basics Modules/features covered
The Control Panel Installation Parameters, Business Day Conventions,

Module Parameters, Security, Customization, Support,
Auditing, Background Processing
Utilities Features for managing debt instruments in the database

as well as general facilities for managing the DMFAS
environment
User Documentation
Modules/features covered
Supplement
Analysis Debt Ratios, Financial Indicators, Interest Rate and

Exchange Rate Sensitivity, DSM+ Export
Auctions Auctions (Debt Securities)
Calculation Methods Calculations used in the algorithms of the DMFAS 6

application (Method 10, 11, 12, 71)
Debt Reorganization Debt Reorganization
Private Non-guaranteed Private Non-guaranteed External Debt

External Debt
Reports Query Tool, Standard reports, User-defined reports,

present value, projections on outstanding, accrued
interest calculations, data validation reports, statistical
bulletin reports, World Bank reporting, syndicated
instrument reports
Short-term External Debt Short-term External Debt

Additional user documentation 13
WH ERE TO OBTAIN MORE I NFORMATION ON DMFAS 6

DMFAS 6 features on-line help which contains general and detailed information on all the
concepts and features of the modules. It is here that you will find definitions of the fields that
are in the tabs and windows.
The on-line help is contextual meaning that help topics are linked with specific modules in
the software. With contextual help, you can access the help topic directly related to the tab,
window or dialog box in which you are working by clicking the Help symbol on the top bar
of the window:
Displayed in a separate window, the on-line help provides a table of contents, glossary and
index to help you find the information you need.
Note that some of the topics may not yet be implemented.
PART 1
Getting Started
16
An Introduction to DMFAS 6
About
About this
this chapter
chapter
An Introduction
About DMFAS to DMFAS

What is DMFAS 6?

The modules in the Portal
What’s new in version 6?
The DMFAS helpdesk
18 Part 1 Getting Started
About DMFAS .......................................................................................................................19
What is DMFAS 6? .............................................................................................................................. 19

Why a new version? ............................................................................................................................. 19
A powerful and easy-to-use application .............................................................................................. 19
Robust debt management capabilities ................................................................................................... 20
Quick projection and analytical capabilities .......................................................................................... 20
What’s new in version 6? .....................................................................................................21
The scope of the new version 21

Technical characteristics of DMFAS 6 ................................................................................................... 25
The DMFAS helpdesk ...........................................................................................................27

About DMFAS
A b o u t D M FA S
UNCTAD’s Debt Management and Financial Analysis System (DMFAS) is software designed
to help countries manage their external and domestic public debt. DMFAS monitors debt
obligations such as government, government-guaranteed and on-lending debts, as well as
grants. It can also be used to monitor private non-guaranteed external debt.
Usually installed in the Central Bank and/or Ministry of Finance, it provides accurate and
timely information for debt management. DMFAS enables debt officers to:
• record all information concerning loans, grants and debt securities including their pos-
sible relationship to projects and to different national budget accounts
• create and update estimated disbursements automatically
• calculate all amortization tables automatically
• record real drawings, real subscriptions and debt service operations
• identify loans where debt service is in arrears and calculate late interest
• produce a wide range of standard and customized reports including reports for valida-
tion, control and statistical bulletins
• perform analysis of their debt portfolio and build debt strategies
WH AT IS DMFAS 6?
DMFAS 6 is the sixth major release of the DMFAS Programme’s software since 1982. Devel-
oped using the latest technology, it offers many new features and all the existing functions of
version 5.3 for all levels of users. Most of the new features and modules have been requested
by the Programme’s client institutions.
WHY A NEW VERSION?

This new version is a response to:
• new practices in debt management offices
• new types of organizations in debt management offices (back, middle and front office)
• advances in computer technology
• the demands and needs of the DMFAS client institutions
A POWER FUL AND EASY-TO-USE APPLICATION
For managers and end-users alike...
DMFAS can be run as a stand-alone system, The general user-friendliness of DMFAS

an intranet or an extranet on most operating helps its users become quickly operational:
and network systems. DMFAS uses the even with minimal training, beginners, can
Oracle database to simplify linkages to other build the DMFAS database and generate
financial software applications. reports.
Fully integrated maintenance procedures The software assists the user by

and powerful safety and security measures automatically checking the validity of data
are included with the software, enabling and by offering numerous possibilities for
managers to assign access privileges to customizing the work environment.
users.
With its flexible interface, DMFAS allows DMFAS is currently available in English,
for easy customization; all codes and field French and Spanish.
names can be modified (and translated) by
authorized end users.
ROBUST DEBT MANAGEMENT CAPABILITIES

Once the database has been filled with information relating to loans, debt securities and
grants, DMFAS becomes a very powerful tool, greatly increasing the autonomy and improv-
ing the management of a debt office. As the system processes huge amounts of information
on debt, more time and energy can be deployed on analytical and management tasks. For
instance, DMFAS allows debt managers to:
• actively monitor the timing, amounts and terms of a country’s external and or domestic
liabilities
• test the sensitivity of debt service to changes in interest rates and exchange rates
• produce drawing requests and payment orders (under specific programming)
QUICK PROJECTION AND ANALYTICAL CAPABIL ITIES
Debt service projections

DMFAS calculates projections based on outstanding and total commitment as well as present
values of future installments using different methods such as the truncation, the pro rata or
the December grouping methods.
Debt service analysis

DMFAS allows debt managers to quickly analyze the impact on the country’s overall future
debt burden resulting from hypothetical changes in financial market. It makes debt service
calculations showing how the total of debt service obligations would be affected by taking on
a proposed loan and projects the impact of borrowing decisions of various entities on a
county’s global debt profile.
Interface with DSM+

Although the World Bank’s Debt Sustainability Model (DSM+) is no longer supported by the
DMFAS Programme, the DSM+ interface makes it possible to continue exporting data to
DSM+.
What’s new in version 6?

THE SCOPE OF THE NEW VERSION
The table below classifies the new components of DMFAS 6 which also integrates all the
existing functions in version 5.3 as well as many improvements.
NOTE
Not all of the modules shown below are covered in this guide. See the chapter “About this
Guide” for a complete list of the user documentation available for DMFAS 6.
Auctions
Debt Securities
Sukuk
Private Non-guaranteed External Debt
Short-term External Debt
New functional Issuance Authorization
modules Debt Reorganization
Analysis module:
- Debt Ratios
- Sensitivity (Exchange Rates/Interest Rates)
- Financial Indicators (Average Terms, Grant Element)
- Risk Model Interface
New technical Auditing

modules Data Export
Long Name
Conditions to Effectiveness
Business Day Conventions
Economic Sector
Instrument Classification
Financial Amendment History
Attachments
New Features
Indexes Reference File
Drawing Request Details
Prepayment, Buyback, Stripping and Suspension
(Debt Service Operations)
Table of Aggregates
Closing Dates
Background Processes
Query Tool
New Tools Control Panel
Direct Search
Portal
New Interface
Graphical User Interface
New modules
The Auctions module is intended for institutions that do not already have such a facility. It is
used to record and manage the whole auction process. It allows users to record bids on zero
coupon and instrument-bearing instruments.
The Debt Securities module is based on an instrument approach. It is used to register all
types of debt securities from short-term to long-term.
The Sukuk module is used to record sukuk—frequently referred to as Islamic securities or

Islamic bonds—as a distinct category of instruments.
DMFAS 6 satisfies the reporting requirements for recording private non-guaranteed external
debt. Another new DMFAS 6 module is specifically intended for recording short-term exter-
nal debt with an original maturity of one year or less.
The Issuance Authorization module allows you to monitor debt securities or sukuk issu-
ances against the authorized amount as allocated in the annual budget plan and keep track of
all the remaining available amounts.
The Debt Reorganization module can handle all types of debt reorganization including:
financing, rescheduling, forgiveness, debt conversion, and prepayments/buybacks. The
module handles all phases of the reorganization and maintains a relationship between the old
debt and new debt.
In the area of analysis, DMFAS 6 includes new features intended for middle office debt man-
agers such as debt ratios which are measures to indicate potential debt-related risks. They fall
into three broad categories: public sector debt, external public sector debt and domestic debt.
Another new analytical feature in DMFAS 6 pertains to exchange rates and interest rates sen-
sitivity. This type of analysis is used to make projections about how changes in interest rates
and/or exchange rates impact a country’s debt service and, consequently, its debt sustain-
ability. It can be used to build scenarios or “what if” simulations for evaluating different refi-
nancing strategies. The risk model interface is used to define an export set for use in a risk
model system such as the Medium-term Debt Strategy (MTDS) tool of the World Bank and
IMF.
New technical modules

The Auditing module (in the Control Panel) offers an extensive tracking facility of all data-
base operations carried out by users as well as modifications of recorded operations and data.
It can help your institution produce audit trails showing who has accessed the system and the
level access, therefore reinforcing data security.
Data Export is a new utility to export a customized database schema from DMFAS 6 into an
XML file from which it can be subsequently imported into a target database such as Access.
The resulting export includes the data structure as well as the data defined and selected by
the user.
New features
The new Long Name field provides space for lengthy name. It can be used if the Name field,
which is limited to 30 characters, is not sufficient to enter an entire name.
The Conditions to Effectiveness dialog box contains options to specify conditions (that is,
legal, administrative or financial) to be fulfilled before a loan becomes effective.
DMFAS 6 includes business day conventions which means the rules for adjusting any pay-
ment date if the date falls on a date that is not a business day (for example, a holiday). The
feature entails rules or conventions for adjusting the payment date of a maturity.
In the classification of instruments by economic sector, DMFAS uses new codes representing
economic activities as established by the International Standard Industrial Classification of all
Economic Activities (ISIC). This hierarchical list consists of 21 sections broken down by divi-
sions, groups and classes.
Instrument classification, while not new, has been considerably revised; the fields Agree-
ment Type and Financing Type used in DMFAS 5.3 have been replaced by three fields in
DMFAS 6: Group, Type and Name.
Financial Amendment History is a new feature that lets you record and consult changes
(including deletions) in financial conditions relating to principal, interest or commissions in
the form of amendments. It is different from the existing Amendment History feature in the
General Information window.
Attachments is a useful feature that allows you to store any document with an instrument for
quick reference or consultation.
A new reference file called Indexes is used to record data for index types associated with
index-linked securities. Index types are used to adjust the principal and/or interest terms of a
debt security. In DMFAS, the index types are implemented as an open list of values; that is, as
a list that is customized by the DMFAS administrator or database administrator.
With the new Drawing Requests window, you can record the details of a drawing request,
such as its type and status. Requests created in this way become available when you record
drawings for loans or grants. It is now also possible to associate several drawing requests
with one real drawing of a loan or grant.
Debt service operations in DMFAS 6 have been extended to include prepayments (for loans)
and buybacks and stripping (for debt securities). DMFAS lets you record full or partial pre-
payments and buybacks. In addition, suspension is now available. It is a technical and inter-
nal type of debt service operation which stops temporarily the “waiting” status of a maturity
in order to process the next “waiting” maturity. This operation makes it possible to process
maturities non-sequentially.
Table of Aggregates is a utility that enables DMFAS 6 to generate reports much faster than
before. It increases the performance of the system.
For a set of instruments, closing date reports list all the transactions (that is, drawings and
debt service operations) recorded between a certified closing date and a comparison date; in
other words, the transactions recorded that affect the debt outstanding at a certified closing
date.
Many calculations that users can perform in DMFAS (projections on outstanding, present
value, updates of amortization tables, etc.) can potentially affect the performance of the sys-
tem. DMFAS 6 offers users the possibility to execute them immediately or to schedule them
according to a date and time they specify. These scheduled calculations are run as back-
ground processes. To consult the status of these calculations, just click on the new Inbox icon
on the top bar or on the DMFAS portal.
New interface
The Portal is a web interface that provides centralized access to DMFAS 6 modules, informa-
tion and resources.
The user interface in DMFAS 6 is a completely new design with improved navigation.
New tools
Tool for reports

A new query tool is available for generating reports in DMFAS 6. It is an external, open
source application. Users of DMFAS 6 also have the option of continuing to use Query
Builder from outside the DMFAS software.
Above the new query tool in DMFAS 6

The DMFAS Control Panel

The DMFAS Control Panel is a new technical and administrative tool in DMFAS 6. It is a
multi-purpose tool used to:
• select installation parameters such as language, system cut-off date and base currency
• configure parameters relating to automatic calculations and the activation of key fea-
tures
• implement security through the creation and administration of users and user groups
as well as the assignment of rights or restrictions to them
• customize the DMFAS 6 software via facilities for personalizing codes as well as other
interface elements
• set up system auditing
• monitor background processing
Above the Auditing module in the Control Panel.
Direct Search
A new tool allows you to search by instrument type from the root level without having to use
the search tool in the specific instrument module. This can provide you with faster access to
the desired instrument. The Direct Search tool can be found in the bottom of the left panel
when you click the Administration menu.
TECHNICAL CHARACTERISTICS OF DMFAS 6

DMFAS 6 is web-enabled which means that you can access it through your browser (for
example, Internet Explorer). With web technology, you can connect to the application from a
remote location.
DMFAS can be installed as a stand-alone system, an intranet or an extranet.
Other technical characteristics of DMFAS are as follows:
• Its new modules were written in Java while existing ones were converted from COBOL
to Java.
• It is open to different application servers.
• It is open to different networking operating systems.
• It is compatible with other systems/interfaces.
• It is built on the Oracle database.
• It is customizable (portal, interface elements).

DMFAS 6 was designed using 3-tier architecture in which the user interface, functional pro-
cess (“business rules”), data storage and data access are developed and maintained as inde-
pendent modules.
3-tier architecture consists of three “tiers” or layers:
• The presentation tier displays information related to services or transactions. It outputs
results to the other tiers.
• The business logic tier controls an application’s functionality by performing detailed
processing.
• The data tier consists of database servers. Here information is stored and retrieved.
This tier keeps data neutral and independent from application servers or business
logic.
In a Web-based application such as DMFAS 6, the three tiers are implemented as follows:
• a front end Web server
• an application server for processing
• a back-end database comprising the data sets and the RDBMS (relational database
management system)
3-tier architecture was developed to address the following concerns:
• Lighten the workstation
• Handle different platforms (servers, clients, languages, etc.)
• Introduce “thin” clients
• Improve the security of data by eliminating the link between the client and data
The DMFAS helpdesk
T h e D M FA S h e l p d e s k
The DMFAS helpdesk offers extensive support in the use of DMFAS. The helpdesk provides
timely and reliable advice and assistance on a wide range of functional and technical areas in
response to any issue you may have.
If you experience any difficulties with the use of DMFAS, please do not hesitate to contact the
DMFAS helpdesk at:
E-mail: dmfas.helpdesk@unctad.org
Telephone: +41 22 917 5653
+41 22 917 5924
Fax: +41 22 917 0045
The Basics of DMFAS
About
About this
this chapter
chapter
An
TheIntroduction
to DMFAS
DMFAS 6 Portal

The DMFAS 6 interface

How DMFAS 6 validates data
The Search facility
Skins, date formats, language
Overview.............................................................................................................................. 31
The DMFAS 6 Portal ..............................................................................................................31
What’s in the Portal? ........................................................................................................................... 31

The different areas of the Portal .......................................................................................................... 31
Logging in to the Portal ....................................................................................................................... 33
How to access the DMFAS modules ..................................................................................................... 33
The DMFAS 6 modules on the Portal ....................................................................................34
Negotiation ........................................................................................................................................ 34
Administration .................................................................................................................................... 34
Mobilization ........................................................................................................................................ 35
Debt service ........................................................................................................................................ 35
Reports ............................................................................................................................................... 35
Analysis .............................................................................................................................................. 36
The DMFAS 6 interface ........................................................................................................37
The left panel, windows and tabs ....................................................................................................... 37

Fields .................................................................................................................................................. 38
Integrated calculator ............................................................................................................................ 38
How to enter data ................................................................................................................................ 39
Saving data ......................................................................................................................................... 40
How DMFAS 6 validates data .............................................................................................................. 40
How to delete data in DMFAS 6 .......................................................................................................... 40
Attaching files ..................................................................................................................................... 41
Recording notes .................................................................................................................................. 41
The Search facility ............................................................................................................................... 42
The working modes in DMFAS 6 .......................................................................................................... 47
Changing skins, date formats and language ........................................................................................ 48

Overview
Overview
This chapter covers two new and essential aspects of DMFAS 6: the Portal and the graphical
user interface. Before attempting to work with the new version, it is important to become
familiar with these topics by reading this chapter carefully. This will not take you a long time
and is certainly worth a few moments of your attention in order to optimize your initial expe-
rience of the system.
T h e D M FA S 6 Por t a l
WHAT’S IN THE POR T AL?
The Portal is a web interface that provides centralized access to DMFAS 6. It is the starting
point for working with the software and provides access to:
• the modules of DMFAS 6
• the latest news and information about DMFAS 6
• useful links to web sites and other resources relating to debt
• secure access to modules based on the profile and privileges defined in the DMFAS
Security module
The quick and convenient access to key modules results from the modular approach of
DMFAS, a more flexible yet structured organization of the application.
The Portal will evolve throughout version 6 and in all subsequent releases of DMFAS.
THE DIFFERENT AREAS OF TH E POR TAL

The DMFAS Portal is divided into five areas as illustrated below.
This area represents the visual identity of the Portal. The logos identify it as the Portal of the
Debt Management and Financial Analysis System (DMFAS), version 6, provided by the
United Nations Conference on Trade and Development.
This area contains links to DMFAS 6 modules. The links are either icons or the names of spe-
cific modules.
The names of modules are organized much in the same way as the main menu in DMFAS 5.3,
which is itself based on the life cycle of a debt instrument.
The icons in this area provide access to the Control Panel and Utilities.
The Control Panel is a new administrative and technical tool, meant for the database admin-
istrator or DMFAS administrator. It consists of functions already existing in DMFAS 5.3 (on
the Support and Utilities menus) in addition to many new functions. The Control Panel is
covered in a separate manual called The DMFAS 6 Control Panel User’s Guide and has its own
on-line help.
The Inbox displays all the operations in DMFAS 6 for which differed background processing
was set up by one or more users. These are operations or calculations that were executed at a
date and time scheduled by the user.
The Utilities icon leads to a wide range of powerful and practical features for managing debt
instruments in the database as well as general facilities for managing the DMFAS environ-
ment. Most of these utilities already existed in DMFAS 5.3 (on the Utilities menu).
The Sign-In area is where all users log in to the DMFAS software. It is associated with the
DMFAS security which defines and controls who can use specific modules or functions.
This area displays a number of links that may vary over time:
• Resources on Debt Management is a compilation of resources relating to debt man-
agement, including links to publications on debt issues, web sites of financial institu-
tions, international organizations, etc. In the future it may evolve to include, for
example, on-line glossaries or web sites providing exchange rates.
• DMFAS web site is a link to the DMFAS web site residing on the UNCTAD server.
• What’s New? opens a page that displays information on the current release.
• Contact Helpdesk displays the contact information for the DMFAS helpdesk.
The DMFAS 6 Portal
LOGGING IN TO THE POR TAL

When you launch the Portal, the links are initially displayed as inactive; that is, they appear
as gray. To activate the links, and thus access to the modules, you need to log in to the system
first.
To log in:
1 Enter your user ID and password in the Sign In fields.
2 Click the Login button.

Depending on your role and privileges as a DMFAS user, the links which you can
access will be activated.
Once you are within a module, you can return to the Portal at any time. To do so, click the
word “Portal” which appears on the top bar of every window:
If you wish to log off and end your DMFAS session, all you have to do is click the word
“Close session” from any window.
HOW TO ACCESS THE DM FAS M ODULES

From the central area of the Portal you can access key DMFAS modules as shown below.
Note that you can access a module in one of two ways:

• clicking the link that is the name of the module. This is the fastest and most direct way.
• clicking the name of the module category (or its icon) to access the top level. For exam-
ple, clicking Administration takes you to the left panel where you can access all the
Administration modules. You would do this if the module is not displayed on the Por-
tal.
Note that the Portal displays those modules that are the most frequently used.
T h e D M FA S 6 m o d u l e s o n t h e Por t a l
You can access all the key DMFAS modules directly from the Portal. The modules are struc-
tured by category according to the typical life cycle of a debt agreement, complemented by
reporting and analysis functions. Below you’ll find a summary of the modules that appear on
the Portal of DMFAS 6. Note that a few of these modules may not yet be implemented.
NEGOTIATION
The Negotiation phase of the life cycle occurs prior to the administration of debt securities.
The Auctions module can be used to record and manage the whole process of an auction. It
lets you record bids on zero coupon instruments and on interest bearing instruments, on a
competitive or non-competitive basis. The data is imported into Debt Securities module
where it appears as the subscription data for the instrument. It is also used to calculate the
Pricing of a given instrument. This module is covered in a separate documentation supple-
ment.
ADMINISTRATION
The modules in the Administration category are summarized below.
In the Loans module, you enter general information about the loan agreement such as the
parties, the reference number and the date of signature. You also enter the specific informa-
tion such as the principal, interest and commission terms.
The On-lent Loans module is used to record on-lent loans and their relationship with the
original loan.
The Debt Securities module is based on an instrument approach. It is used to register all
types of debt securities from short-term to long-term. The module is organized into the fol-
lowing categories: money market instruments, bonds and notes, promissory notes and oth-
ers.
Sukuk (plural of sakk) are investment certificates that comply with Islamic rules and princi-
ples (Shari’ah). They are frequently referred to as Islamic securities or Islamic bonds. Infor-
mation on these instruments are available in the on-line help.
For Private Non-guaranteed External Debt, DMFAS 6 lets users enter aggregated data or
individual instruments; in addition, it offers two modes for recording aggregated data: either
manual entry or an import from Excel.
The Short-term External Debt module is specifically designed for recording the short-term
external debt of the public and private sectors with an original maturity of one year or less as
aggregated data; it also allows manual entry or imports from Excel.
The Grants module is used to record general and specific data relating to a grant.
The General Agreements enable you to enter general information about frame agreements
which are linked to related credit agreements; you can then link this information to the indi-
vidual agreements arising from them.
The Debt Reorganization module can handle all types of debt reorganization including refi-
nancing, rescheduling, forgiveness, debt conversion and prepayments (or buybacks for debt
securities). The module handles all phases of the reorganization while maintaining a relation-
ship between the old and new debt. You record here the general information on the Agreed
Minute of the Paris Club and the resulting bilateral agreement.
Reference Files are the starting point for your work in DMFAS. They contain detailed infor-
mation which you can refer to from many DMFAS windows. They include essential and
optional data about the participants, exchange rates, budget lines and financing relating to an
agreement.
Separate documentation supplements (available in the on-line help) exist for the following
modules: Debt Reorganization, Private Non-guaranteed External Debt and Short-term Exter-
nal Debt.
The DMFAS 6 modules on the Portal
MOBILIZATI ON
The Mobilization category is where you record drawings on loans, on-lent loans, private
external debt or grants. You can also record subscriptions for debt securities and sukuk.
With the new Drawing Requests window, you can record the details of a drawing request,
such as its type and status. Requests created in this way become available when you record
drawings for loans or grants. Now you can also associate several drawing requests with one
real drawing of a loan or grant.
DEBT SER VICE

With the Debt Service modules, you can record debt service operations on principal, interest,
commission and late interest for loans, on-lent loans, debt securities and private external
debt. You can also record principal, return and fees for sukuk.
The Budget Period Allocations module is used to define budget periods and budget alloca-
tions.
R E P O R TS
With its powerful Reports module, DMFAS 6 is capable of generating a wide range of stan-
dard and customized reports using a new report tool. These include reports on loans, on-lent
loans, debt securities, sukuk, grants, general agreements, reorganization agreements and ref-
erence files.
Std (Standard) Reports are predefined reports delivered with the system. These are opera-
tional as well as analytical and managerial reports already created by the central team of the
DMFAS Programme.
UD (User-defined) Reports are reports created and generated by DMFAS users in any given
country. These can be operational as well as analytical and managerial reports. A user-
defined report can be based on a DMFAS standard report; this means that it can be copied
and modified as needed.
Data Validation are predefined reports that allow you to check the accuracy and consistency
of the data recorded in the database.
Statistical Bulletins refer to a library of reports that could be included in a debt statistical
bulletin.
World Bank reports make it possible to generate Forms 1 and 2 of the Debtor Reporting Sys-
tem (DRS) of the World Bank.
Reports are covered in a separate documentation supplement available in the on-line help.
ANALYSIS
In the Analysis category, DMFAS 6 includes new features intended for middle-office debt
managers.
Debt ratios are measures used to indicate potential debt-related risks. They fall into three
broad categories: public sector debt, external public sector debt and domestic debt.
Sensitivity analysis is used to make projections on how changes in interest rates and/or
exchange rates would impact a country’s debt service and, thus, its debt sustainability. It can
be used to build scenarios or “what if” simulations for evaluating different refinancing strate-
gies.
Financial Indicators are key analytical measures used to evaluate debt; they include:
• the grant element, which measures the concessionality of a loan
• average terms with respect to interest rates, maturities, life and grace periods for a
selected groups of loans
Debt Sustainability Interface serves as an interface between DMFAS and the World Bank’s
DSM+ application, which is no longer supported by the DMFAS Programme.
The Risk Model Interface is used to define an export set for use in a risk model system. It is a
customized version of the Medium-term Debt Strategy (MTDS) tool which is a framework
jointly developed by the World Bank and IMF. It encompasses a “best practice” approach
guiding debt management offices in designing their strategy and an analytical tool (AT).
The Analysis module is covered extensively in a separate documentation supplement.
The DMFAS 6 interface
T h e D M FA S 6 i n t e r f a c e
The interface has been completely restructured to make your work with the software as
enjoyable as possible. The look-and-feel is based on a complete redesign of the graphic ele-
ments as well as the adoption of current Web standards and conventions.
Although a lot has changed in the interface, you’ll find that the environment retains a familiar
structure.
THE LEF T PANEL, WINDOW S AND TABS

The main menu bar in version 5.3 has been kept but menu options were replaced with a left
panel from which you can navigate from one module to another.
Most of the module windows are now organized into tabs just below the title of the window.
Clicking a tab brings you to the next window in the module.
Here, for example, is the Participants reference file. You’ll notice that the window is made up
of four tabs: Basic Info, Contact Information, User Info and Notes.
The sub-windows of version 5.3 were replaced by dialog boxes which you access by clicking a
link. The orange text informs you whether the dialog box is for consulting or for recording
data.
FIELDS
Within the windows, many fields were repositioned, moved to new locations or regrouped.
Where possible, fields have been logically organized into boxes identified by headings in
orange.
All mandatory fields are now displayed with an asterisk (*).
All date fields now offer a calendar which you can use when entering any date. To display it,
simply click the icon beside the date field.
INTEGRATED CALCULATOR
When entering amounts, you can now make use of a calculator which is directly accessible
from the left panel.
In fact, you can copy the result of the calculation and paste it directly into a DMFAS field.
HOW TO ENTER DATA
The grid
A new graphical method for entering records was implemented in many of the windows and
tabs of the DMFAS 6 modules. It is a grid where you enter data in one or more rows of cells
through the “Add Row” button.
For example, in the window below, exchange rates were entered using this grid:
To enter a record using this bar:

1 Click the “Add Row” button:
2 In the dialog box, enter all the values that comprise the record and click Accept.
When you enter a row, you are actually creating a record in the database. DMFAS immedi-
ately displays it in the window in which you are working. Beside the new row are two new
icons shown below:
This icon is used to...
delete a row of data
modify a row of data

Edit functions
The Edit functions (Cut, Copy, Paste) of DMFAS 5.3 are now available in the contextual menu
also called the “right-click” menu.
SAVING DATA
The Save command operates at the window level, not the tab level. This means that clicking
the Save button saves the data entered in all the tabs of a window. Therefore, you need to
complete all the mandatory fields in all the tabs of a window before saving data.
HOW DMFAS 6 VAL IDATES DATA

For all modules, DMFAS 6 validates the data you enter on a window-basis. This means that
once you’ve entered values in all the mandatory fields in the different tabs of a window, you
can click Save to record the data.
At that point, DMFAS validates all the values you’ve entered and indicates any missing fields
or incoherent values with an exclamation point (“!”). If all the values are correct, you can then
continue to enter data in the remaining windows of the module.
HOW TO DELETE DATA IN DM FAS 6
The Delete icon appears on the left panel only for a record that has been saved.
The Reset icon is the equivalent of the “Clear” option in DMFAS 5.3. You can use it to reset
the window to its initial state: all empty fields.
ATTACH ING FIL ES

You can now attach a document in any format (such as Word, Excel or PDF) to an instrument
recorded in the database. This is a useful feature that makes it possible to store all the contrac-
tual documents of a loan agreement or a debt security for quick reference or consultation.
RECORDING NOTES
DMFAS 6 offers more ways to enter notes at convenient locations. Many of these notes
remain visible as well.
There are now four ways to record notes:

• the Notes tab which is available in several modules
• a field offering space for notes which is available in some tabs or dialog boxes
• a note field which is available in New Row dialog boxes
• A ! button (similar to the DMFAS 5.3 button) which opens a dialog box where you can
record discreet notes that remain hidden until you decide to open them.
As a general rule, you can enter up to 240 alphanumeric characters in one note.
THE SEARCH FACILITY

The Search facility replaces the Query mode in DMFAS 5.3 which involved pressing the
F7/F8 keys on your keyboard as well as the use of the File > Query menu. The Search facility
is what you will be using to enter queries that retrieve records from the database. In DMFAS,
a record can be a loan instrument, debt security, participant reference file, etc.
The icon for the Search facility is located at the bottom of the left panel. When you click it,
DMFAS opens a dialog box where you can indicate the criteria for your query. The criteria
available to define a query will depend on the module you are working with.
The number of records (matches) retrieved by the query is displayed in the Query tab. The
latest results of any query remain available in the Results tab as long as you are working in
the same module. This means that you can return to this tab and select another element with-
out re-entering the criteria.
The Direct Search tool

A new tool allows you to search by instrument type from the root level without having to use
the search tool in the specific instrument module. This can provide you with faster access to
the desired instrument. The Direct Search tool can be found in the bottom of the left panel
when you click the Administration menu. See Example 5 in this chapter for a demonstration
of its use.
EXAMPLE 1
Let’s say you wish to search for a loan in DMFAS but that you are not sure about its Loan ID.
One way to find it would be to enter a query to retrieve all the loans recorded and then scroll
through the results until you find it.
In the Query tab you would enter a query using the Instrument ID as one criterion. You
would also enter the Name as another criterion since the name of the loan is likely to be more
descriptive.
You would also specify that the operator “IS NOT NULL” to retrieve all instruments by ID.
The operator means literally “all instrument whose ID is not equal to zero”; obviously, no
loan would have 0 as an ID or name!
When you click the Execute button, DMFAS returns a list of all the loans in the database in
the Results tab. Using the arrows, you can scroll though the pages to view the various instru-
ment IDs and names.
EXAMPLE 2
You wish to retrieve a discount money market instrument whose instrument ID is

“70613000”.
This query means that the record to be retrieved is a debt security with an Instrument ID
equal to “70613000”.
When you execute the query, DMFAS displays the following:
EXAMPLE 3
This time you wish to view a series of discount money market instruments with IDs falling
within the range of “7060400” to “70609000” by name. You also wish to view the names of
these instruments. For such a query, you would enter the following criteria:
This query thus instructs DMFAS to retrieve a range of instruments with Instrument IDs that
fall between “70604000” and “70609000”. The results are as follows:
EXAMPLE 4
Here the Search facility retrieved all the Participants reference files in DMFAS. The top right
part of the tab displays the number of pages retrieved (76) and not the number of records.
EXAMPLE 5
You wish to search for an instrument with the ID “DDPBBNNTBL2005”. However, you are
not sure whether it is a loan or a debt security so you decide to use the Direct Search tool to
save time. You first click the Direct Search icon at the bottom of the left panel of the Adminis-
tration menu.
In the Search window, you enter the search criteria shown below:
The search criteria specifies a search in the database for a loan with the above ID. You click
the Execute button to launch the search and to view the results.
However, DMFAS informs you that there is no loan by this ID:
At this point, you simply change the Instrument Type to “Debt Security” and click the Exe-
cute button again. This time, DMFAS finds the instrument which is indeed a debt security!
Clicking the “General Info” link takes you directly to the instrument in the Debt Securities
module.
T HE WOR KI N G M O DE S I N D MFAS 6
Next we will look at the two working modes in DMFAS 6.
With the Search facility, when you execute a query, DMFAS returns a list of records that you
can select in one of two working modes:
• Display - This mode provides you with read-only access to a record; that is, you can
consult the data but not modify it in any way.
• Edit - This mode enables you to modify any of the record’s data.
In addition, access to Edit mode may also be affected by the user rights defined in the Secu-
rity module. Therefore, even in working mode you may not have the rights to modify data in
certain modules.
CHANGING SKINS, DATE FORMATS AND L ANGUAGE

Using the options found in the User Parameters in the Utilities module, you can personalize
your DMFAS environment through a choice of skins, date formats and languages.
A skin is a set of colors, fonts and images for a web site. DMFAS 6 offers three attractive skins
to choose from.
DMFAS 6 is currently available in three languages: English, French and Spanish. You can
switch from one of these language to another at any time.
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Recording Historical Data and
Operations
About
About this
this chapter
chapter
An Introduction to DMFAS
Historical Data and Operations

Historical Drawings

Historical Debt Service
Historical Commissions
About Historical Data and Operations ...................................................................................51
What are historical data and operations in DMFAS? .............................................................................. 51

How to record a loan’s historical data ................................................................................................. 51
About Historical Drawings .....................................................................................................52
Where to record historical drawings ..................................................................................................... 52

Record detailed or aggregate data? ...................................................................................................... 52
About Historical Debt Service and Commissions ....................................................................53
How to access historical debt service .................................................................................................... 53

Historical balances and the cut-off date ............................................................................................... 53
Historical debt service is recorded at the tranche level ........................................................................... 54
Amounts in local currency .................................................................................................................... 55
Using the Historical Debt Service window ..............................................................................56
The structure of the window ................................................................................................................ 56

About Historical Data and Operations
About Historical Data and Operations

WHAT ARE HISTORICAL DATA AND OPERATIONS IN DMFAS?
In DMFAS historical data and operations refer to data and operations before the cut-off date.
In the case of a loan, historical data covers its general information (such as the signature and
approval date), its real drawings and its debt service operations, as illustrated below.
The following sections explain how to record historical data and operations taking the exam-
ple of a loan; however, explanations apply to all debt instruments, including debt securities
and sukuk.
HOW TO RECORD A LOAN’S HISTORICAL DATA
To record historical data:

1 First register the loan as a normal loan by filling in the General Information and
Tranches windows.
See also Chapter 7, “Registering Loan Agreements” and Chapter 10, “An Introduction
to Debt Securities”.
2 Enter historical real drawings (that is, drawings before the cut-off date) the same way
you would enter current real drawings in the Real Drawings window.
3 Enter historical debt service and commissions loan by loan and tranche by tranche in
specific windows for historical data.
Further explanations are given in the next sections.
About Historical Drawings

WH ERE TO RECORD HIS TORI CAL DRAWING S
The procedure for entering historical real drawings (drawings made before the cut-off date)
and current real drawings is exactly the same in terms of the DMFAS windows used.
R E C O R D DE T A I L E D O R A G G R E G A T E D A T A ?
For historical drawings a decision must be made on the type of data you wish to record.
Indeed, you can either:
• Enter each of the historical drawings individually on the date they actually took place;
or
• Aggregate all historical drawings on a given date.
The table summarizes the advantages and disadvantages of each method.
Entry of: Individual historical drawings Aggregated historical drawings
Advantage • Interest can be calculated • Less manual recording

precisely from the begin- work.
ning of the amortization
table.
• Accurate information on • Possibility to aggregate all

historical drawings can be historical drawings or to
obtained. have partial aggregates on
a monthly or yearly basis.
Disadvantage • It may involve a lot of • No accurate calculation of
recording work. interest.
• No detailed information on
historical drawings.
RECOMMENDATION
For loans totally disbursed at the cut-off date but still being reimbursed: you can record the total
amount of drawings at the drawing limit date. This is an appropriate solution if you have
many loans to record or if detailed information on drawings is not available.
For loans partially disbursed at the cut-off date and therefore still being drawn: individual entry is
strongly recommended. Nevertheless, if the workload involved is too overwhelming, a good
compromise is to aggregate drawings on a yearly basis.
Tip
If the real drawing date is unknown, enter aggregate drawings at the drawing limit date.
For detailed information, see the chapters in this guide on drawings.

About Historical Debt Service and Commissions

HOW TO ACCESS HI STORICAL DE BT SE R VI C E
Historical debt service is recorded in the Historical Debt Service and Historical Commission
windows. To access this module from the Portal:
 Select Debt Service and from the left panel, click Loans (or Debt Securities or
Sukuk) and then click Historical Debt Service.
or
 Select Debt Service and from the left panel, click Loans (or Debt Securities or
Sukuk) and then click Historical Commission (or Historical Fees).
HISTORICAL BALANCES AND THE CUT-OFF DATE

To record a loan still being reimbursed at the cut-off date, it is necessary to determine the his-
torical balances at that date. Historical balances are aggregate data for the debt service opera-
tions and commissions that occurred up to and including the cut-off date.
Before the cut-off date, debt service operations are entered as historical balances, that is,
aggregate data. After the cut-off date, all operations should be entered as individual transac-
tions.
HI STORICAL DE BT SE R VI CE IS RE CORDED AT THE TRANCHE LEVEL

Historical debt service must be entered on a loan by loan and tranche by tranche basis. There-
fore, for each tranche it is necessary to determine the historical balances at the cut-off date.
To do so, preparatory work must be carried out, the volume of which depends on the number
of loans. It includes compiling historical balances manually on a tranche by tranche basis
(using amortization tables produced by DMFAS) and also data reconciliation with individual
creditors when data is not available or not comprehensive. Depending on the scope of the
data validation/reconciliation exercise, the preparatory work may be more or less time-
consuming.
EXAMPLE
After printing the amortization table of tranche 1 of the loan called Test, you draw a line at the
cut-off date, here 31 December 2002, and calculate aggregate amounts of principal and inter-
est: 210,000 USD of principal paid and 82,229.30 USD of interest paid to be recorded in the
corresponding fields of the Historical Debt Service window.
A MO UN TS I N LO C A L C UR REN CY
If the option historical amounts in local currency is activated in the DMFAS Control Panel,
DMFAS converts historical debt service operations and commissions to local currency using
the exchange rate at the cut-off date; it fills in the corresponding fields automatically.
NOTE
You can always modify manually amounts in local currency that have automatically been
filled in by DMFAS.
If the option is not activated, you have to fill in the local currency amount yourself. In this
case, DMFAS does not validate the amount of the local currency against the exchange rate at
the cut-off date.
Using the Historical Debt Service window
REMINDER
You can enter historical debt operations only for loans which have already been created using
the Loans modules and only for debt securities created using the Debt Securities module.
THE STRUCTURE OF TH E WINDOW

The window is divided into four tabs, each of which covers a specific type of debt service
operation. The structure is depicted below:
Note that the amounts paid, rescheduled and forgiven are aggregated and deducted from the
loan’s drawings to calculate the loan’s outstanding balance.
If feasible, it is recommended to break down the historical data on principal and interest,
arrears, and late interest in the appropriate categories. If the information is not available, for
example for old loans, you can enter the total amount in the Paid field.
Recording and Maintaining
Reference Files
About
About this
this chapter
chapter
Reference to
DMFAS
About Files

Participants

Bank Accounts
Exchange Rates
Common Interest Rates
Other Reference Files
About Reference Files ...........................................................................................................59
What are reference files? .................................................................................................................... 59

Why you should begin with reference files ........................................................................................... 59
How to access reference files ............................................................................................................... 59
The Participant reference file ................................................................................................60
How the window is organized .............................................................................................................. 60

The Basic Info tab ................................................................................................................................ 60
The Contact Information tab ................................................................................................................ 61
The User Info tab ................................................................................................................................ 61
The Notes tab ...................................................................................................................................... 61
Bank Accounts ......................................................................................................................62
The Bank Accounts Information tab ..................................................................................................... 62

The User Info tab ................................................................................................................................ 62
The Notes tab ...................................................................................................................................... 62
Exchange Rates ....................................................................................................................63
Methods for entering exchange rates ................................................................................................... 63

How often should exchange rates be entered? ..................................................................................... 64
Which currencies should be entered? .................................................................................................. 64
The automatic downloading of exchange rates from the Internet .......................................................... 64
How to enter several values for the same exchange rate ...................................................................... 65
How to correct an exchange rate ......................................................................................................... 65
Where to get exchange rates ............................................................................................................... 65
Common Interest Rates .........................................................................................................66
Floating interest rates and base rates ................................................................................................... 66

Why “common rates”? .......................................................................................................................... 66
Creation of specific interest rates used by some creditors ...................................................................... 66
Budget Lines .........................................................................................................................67
What are budget lines? ........................................................................................................................ 67

Which institutions will use the budget lines facility? ............................................................................... 67
Budget lines and debt service ............................................................................................................... 67
When do you record budget lines? ....................................................................................................... 67
Discount Rates ......................................................................................................................68
Maturity Groups ....................................................................................................................68
Interest Rate Groups ............................................................................................................69
Euro National Currency Units ................................................................................................69
Funds ...................................................................................................................................70
Historical Exchange Rates ......................................................................................................70
What are historical exchange rates? ..................................................................................................... 70

How are they calculated? ..................................................................................................................... 70
Indexes .................................................................................................................................71
Projects ................................................................................................................................71
About Reference Files
About Reference Files

WHAT ARE REFERENCE FILES?
Reference files contain detailed information which you can refer to from many DMFAS win-
dows. They include both essential and optional data about the participants, exchange rates,
interest rates, budget lines and financing relating to an agreement:
WH Y YOU SHOU LD BE GIN WITH REFE RENCE FILE S

Before registering any agreement, you should begin by entering values in the reference files.
This represents the preliminary phase in recording an agreement in DMFAS.
Of the reference files, those pertaining to participants and exchange rates have priority over the
others because you will require this information in many modules of the system.
You should therefore begin by recording information in these windows. In general, all other
reference files are optional depending on the nature of the agreement.
Note that during the first installation of DMFAS in a site, a set of exchange rates and floating
interest rates is usually provided.
HOW TO ACCESS REFERENCE FILES

 From the Portal, select Reference Files. Then from the left panel select a spe-
cific type of reference file.
T h e Pa r t i c i p a n t r e f e r e n c e f i l e
With the Participant reference file, you can record or view information about the institutions
(or individuals) participating in various agreements.
This should be the first phase before registering any agreement or debt instrument in DMFAS,
especially when the list of participants is long.
For example, for a loan agreement, prepare a list of all the participants in this agreement; that
is, the main creditor, the main debtor, other creditors, the guarantor, the insurer, the project
manager, etc. Then enter each of these participants in the Participant reference file. This
allows you to select the participants in the modules where this information is needed.
RECOMMENDATION
It is critical to identify participants correctly.

Be sure to distinguish the Asian Development Bank (AsDB) from the Asian Development
Fund (AsDF) as well as the African Development Bank (AfDB) from the African Develop-
ment Fund (AfDF). This also applies to associated institutions that are part of the same group
such as IDA and IBRD with respect to the World Bank.
HOW THE WINDOW IS OR GANIZED

The Participant reference file is made up of four tabs. The fields in each tab are described in
the following sections. To move from one tab to another, press the corresponding tab directly
from the active window.
To record a participant (institution or individual) you have to assign a unique ID number and
name to it. Once you enter this information, you can select the participant from a list of values
available in various DMFAS tabs or windows.
THE BASIC INFO TAB

The first tab of the Participant reference file provides fields for data entry on the institution’s
name, address and classification.
The Participant reference file
THE CONTACT INFORMATION TAB

You can enter the names and contact information for up to two persons in this tab. The details
you enter here may be useful for future reference.
THE US ER I NFO TAB

The User Info tab offers two types of user-defined fields: user codes and user fields.
THE NOTES TAB

The Notes tab is an area in which you can record, view or modify notes about the participant.
Feel free to record detailed information or other observations which you can use for future
reference.
Bank Accounts
THE BANK ACCOUNTS INFORMATION TAB
This reference file is used mainly by institutions who have linked the DMFAS payment order
facility with their system. The fields in this tab let you record or consult data on one or several
bank accounts for a participant.
THE US ER I NFO TAB

The User Info tab offers two types of user-defined fields: user codes and user fields.
THE NOTES TAB

The Notes tab is an area in which you can record, view or modify notes about the bank
account. Feel free to record detailed information or other observations which you can use for
future reference.
Exchange Rates
Exchange Rates
This reference file is used to record exchange rates used by DMFAS in calculations such as
real drawings and debt service operations. It is critical that these exchange rates be as accu-
rate and up-to-date as possible.
METH ODS FOR ENTE RING EXCHANGE RATES

The Exchange Rates window provides two fields for recording exchange rates.
• You can enter the exchange rates of foreign currencies with respect to 1 unit of the
base currency.
• You can enter the exchange rates of the local currency with respect to 1 unit of the
foreign currency.
Regardless of the field you work with, DMFAS calculates the values in the other field.
Always start by entering the exchange rate of the local currency and the base
currency (by default, the base currency is the USD).
Start by clicking the Add Row button.
The local currency is automatically selected with a value of “1”. Enter its value against 1 USD
(base currency). You must then accept and save the information.
Then select the USD, enter the exchange rate in one of the fields, click Accept and DMFAS
will fill in the other one.
Entering exchange rates for other currencies

You enter exchange rates in one field or another, depending on which method you prefer to
work with. In either case, DMFAS will always fill in the corresponding value in the other
field.
When you save the exchange rates you entered and exit the window, DMFAS sorts the cur-
rencies in alphabetical order.
REMINDER
The Exchange Rates window displays the local currency and the base currency selected in the
installation parameters of the DMFAS Control Panel.
Of course, if the Local Currency and the Currency Exchange Base are identical, the window
lets you record exchange rates in one of the following formats:
• 1 unit of foreign currency = x units of local currency or
• 1 unit of local currency = x units of foreign currency
A parameter to minimize recording errors

A parameter called Exchange Rate Fluctuation % (DMFAS Control Panel) allows you to receive
a warning message whenever the variation between the value entered and the value previ-
ously recorded for the same currency exceeds the tolerance factor; nonetheless, you can still
enter the exchange rate. For example, with a tolerance factor for the exchange rate fluctuation
set at 20%, you will receive a warning if by mistake you entered 16.56 instead of 1.656.
HOW OFTEN SHOUL D EXCHANGE R A T E S B E E N T E R E D ?

In a debt management office, one person should be assigned the responsibility of entering
official exchange rates on a daily basis. This guarantees the accuracy of the data in all the
reports that are subsequently generated.
If you are working with less frequently used currencies, you can enter their exchange rates as
you record individual transactions.
WHICH CU RRENCIES SHOULD BE ENTERED?

If you are the person handling the input of exchange rates, then you should always enter
exchange rates for these currencies: local currency, U.S. dollar, euro and Special Drawing
Rights (SDR). This is because DMFAS requires these exchange rates for certain calculations
such as drawings.
In general, you should also enter the six currencies that affect 90% of all transactions; these
may include the euro, Japanese yen, Swiss franc, British pound, U.S. dollar and SDR.
THE AUTOMATIC DOWNLOADING OF EXCHANGE RATES FROM THE INTERNET

The DMFAS Programme provides a number of scripts to capture and download exchange
rates from different web sites. These scripts then input these rates directly into DMFAS.
Web site Type of Rates Based On Currencies Available Period
www.imf.org Current and SDR 40 widely-used From 1995

historical currencies to date
exchange rates
www.oanda.org Current and USD All currencies. From 1973

historical (The rates can be to date
exchange rates downloaded by
currency in groups of
(The rates given 5 years.)
are the average
between the high
and low rate for
any day.)
www.chicagofed.org Historical USD 30 widely-used From 1971

exchange rates currencies to date
A simplified script is also available for extracting exchange rates only for USD, SDR and a
local currency.
Exchange Rates
NOTE
If you are entering estimated values (to be used for example for hypothetical loans or debt
securities) you may repeat the most recent exchange rate for all future months.
The rates you enter in this reference file may differ from those of the creditor. This can result
in an erroneous undisbursed amount when real drawings are effected in a currency other
than the loan currency because DMFAS automatically calculates the amounts in the loan cur-
rency using the exchange rates you recorded here. See either Chapter 15 or 16 on loan or grant
drawings for more detailed explanations on how DMFAS calculates and checks amounts.
CAUTION
Be careful: for some currencies, the exchange rate is presented in the format 100 units of for-
eign currency = x units of local currency. When recording the information, do not forget to
convert it to the DMFAS format.
HOW TO ENTER SEVERAL VALUES FOR T HE SAM E E XC HA N GE R A T E

DMFAS gives you the possibility to record different values for the same exchange rate. This
facility is meant to take into account exchange rates fixed in the framework of an exchange
arrangement. An exchange arrangement is a set of exchange rates for the national currency,
fixed by a country’s administration to finance its imports.
Tip
You can also use this facility whenever your institution uses different exchange rates, for
example, a specific rate for governmental debt and another for public enterprises.
To implement this facility, a currency name must be created for each exchange rate. This can
be done by the DMFAS administrator from the Currencies window in the DMFAS Control
Panel.
Thereafter, you would enter the exchange rates of these currencies in the Exchange Rates ref-
erence file, selecting the specially created currencies from the list of values.
When recording a real drawing or a debt service operation, you would then select in the
Exchange Arrangement field the appropriate rate.
HOW TO CORR ECT AN EXCHANGE RATE

If you have recorded an erroneous exchange rate, you need to delete the row and re-enter the
exchange rate.
WH ERE TO GET E XCHANGE RATES

You can obtain official exchange rates from a number of web sites. The following are recom-
mended:
• OANDA, the web site of Olsen & Associates (for current and historical rates)
www.oanda.com
• The IMF web site (for SDR rates)
www.imf.org
• The Federal Reserve Bank of New York (for current and historical rates)
www.x-rates.com
• The Universal Currency Converter of Xenon Laboratories (for dynamic current rates)
www.xe.com
• The official web site of any central bank
Common Interest Rates

This window is used to enter floating interest rates that DMFAS uses for interest calculations
in other modules. These rates can also serve as “base rates” and be used for the calculation of
variable interest rates.
FLOATING INTEREST RATES AND BASE RATES

A floating interest rate is a benchmark short-term cost of capital that reflects the cost of capital
and eventually the risk of lending to the best customer. Examples of such interest rates are the
LIBOR (London Interbank Offered Rate) or the prime rate.
A base rate is a recognized and published interest rate, for example LIBOR, which determines
the rate to be applied to variable interest rate loans. The rate for the loan is then determined
by adding a spread to the base rate, for example 1.25 over LIBOR.
WH Y “COMMON RATES ”?
Rather than repeatedly enter the different values of a floating interest rate for each tranche or
series, you can enter in this window the periodical rates of a specific interest rate: by default,
DMFAS then applies the same values to all the tranches or series associated with this interest
rate.
However, you can apply a rate that differs from the common rate to an individual tranche. In
that case, you should enter the rate within the interest terms for that tranche.
CREATION OF SPECIFIC INTE REST RATES USED BY SOME CREDI TORS

Sometimes creditors apply their own rates rather than the common banking rates. In such a
case, when a loan is made up of many tranches, it is recommended that you create an interest
rate specifically for such creditors and then enter the interest rate values only once within the
Common Interest Rates window. In this way, you avoid having to enter the same rates for
each one of the creditor’s tranches.
EXAMPLE
Let’s say that the loan agreement stipulates that its applicable interest rate is LIBOR
6-months. However, the rates that are periodically communicated do not correspond at all to
market rates for LIBOR 6-months during the same period. To avoid having to regularly
update all these interest rates individually, you should create a new interest rate type; for
example, ECGD - 6 months. You can then enter the new rates in one go using the Common
Interest Rates window.
Budget Lines
Budget Lines
This window lets you register budget lines. This information is used for reference in windows
related to scheduled and real payments and also real drawings:
• Loans/Tranches and Debt Securities/Series modules
• Loan Drawings/Debt Security Subscriptions (Mobilization menu)
• Budget Period Allocations (Debt Service menu)
• Debt Service Operations (Debt Service menu)
Budget lines are also available for sukuk.
WHAT ARE BUDGET LINES?

A budget line is a reference to the budget account used for debt service operations such as the
payment of principal, interest or commission.
WH ICH INSTITUTIONS WILL USE THE BUDGET LINES FACILITY?

In general this facility will be used only by institutions that wish to use DMFAS to link the
debt servicing to the budget.
BUDGET LINES AND DEBT SER VICE

The budget line feature lets you associate a loan with the budget line(s) used for servicing the
debt. Combined with the budget allocation facility, it lets you link debt service payments to
their corresponding budget lines. This entails monitoring the budgetary resources allocated
for debt servicing and if necessary informing the budgetary authorities of any potential prob-
lems.
This optional feature is used mainly for external direct loans.
WHEN DO YOU RECORD BUDG ET LINES?

Budget lines are usually entered after the configuration of the system, during the first installa-
tion of DMFAS in a site: indeed, budget lines rarely change from one year to another.
Discount Rates
A discount rate is the interest rate used to convert an amount due in the future or a future
income to its present value.
An example of discount rates is commercial interest reference rates (CIRRs). The OECD
Arrangements on Guidelines for officially supported Export Credits stipulates that minimum
interest rates shall apply to official financing support (through direct credits/financing, refi-
nancing or interest rate subsidy) for export credits.
A CIRR is fixed for each currency of the Participants to the Arrangement and the CIRRs are
set on the 15th of each month. They correspond to the most favorable terms of fixed rates that
a country is able to contract on the international financial market.
Note that CIRRs are used for present value calculations.
Maturity Groups
This window lets you define and view maturity periods by group. A maturity period is an
expression used to denote periods during which principal payments are made for a debt
including the grace period. Use of this feature is optional.
You can use these maturity groups as criteria for selection when creating a user-defined
report. DMFAS determines that a debt instrument belongs to a maturity group based on reim-
bursement terms at the tranche/series level.
Each maturity group is shown with its order (1, 2, 3, etc.) and a range such as “1 to 5 years”.
The maturity groups shown are predefined in DMFAS. However, you can customize these
groups to suit the specific needs of your institution.
Interest Rate Groups
Interest Rate Groups

This window lets you define and view interest rates by group. You can use these interest rates
as criteria for selection when creating a user-defined report. DMFAS determines that a debt
instrument belongs to an interest rate group based on the interest terms at the tranche/series
level. Use of this feature is optional.
Each interest rate group is shown with its order (1, 2, 3, etc.) and a range such as “5% and
6%“.
The interest rate groups shown are predefined in DMFAS. However, you can customize these
groups to suit your particular needs.
Euro National Currency Units

The European currency, the euro (EUR) was officially launched in 1999. The national currency
units (NCUs) such as the French franc or Deutschmark effectively became denominations of
the euro during the “transition period” which lasted from 1 January 1999 to 31 December
2001.
The conversion rates between the euro and each national currency was fixed irrevocably.
These are the rates that appear in the Euro National Currency Units window.
This window is intended to assist in the input of exchange rates or in conversions of opera-
tions from national currency units to euros.
You can use the information that appears in the window for consultation purposes.
The existing fields are protected against updates since these rates are permanent. Of course,
you can always add new currencies and rates in the window whenever a new nation adopts
the euro as its currency.
Funds
This reference file has been created to register funds. Funds are money deposits in special
accounts. In DMFAS funds relate to two features: revolving credit and local government debt.
This window lets you record basic information about funds. Fund information is used for ref-
erence in specific windows in:
• general agreements
• loans/tranches or debt securities/series modules
• debt service operations
Historical Exchange Rates

The exchange rates of this reference file relate to loans originating from the Asian Develop-
ment Fund (AsDF). These loans are denominated in SDR and registered in DMFAS with the
option “unknown tranches”; each tranche of the loan is expressed in one of the currencies
used for drawings.
Note that “historical exchange rate” is the official AsDF term.
CAUTION
Do not confuse the exchange rates of this reference file with those used for operations
recorded as historical balances, that is, operations before the cut-off date. For historical opera-
tions, the reference file for “ordinary” exchange rates is used.
WHAT ARE HISTORICAL EX CH ANGE RATES?

The historical exchange rate (HER) of a currency is an average exchange rate against the SDR
(loan currency) applied to drawings. HERs are calculated for each drawing currency and the
HER of a given currency is specific to each loan.
HOW ARE TH EY CALCU LATED?

DMFAS calculates automatically the HER of a currency dividing the sum of drawings in SDR
(loan currency) by the equivalent amount in the drawing currency (tranche currency).
EXAMPLE
Tranche in CHF Equivalent in SDR HER
1st drawing: 5,000,000,00 2,000,000.00
2nd drawing: 5,000,000.00 3,000,000.00
Total drawings: 10,000,000.00 Total equivalent: 5,000,000.00 0.5

Indexes
Indexes
This reference file is used to record data for index types associated with index-linked securi-
ties. Index types are used to adjust the principal and/or interest terms of a debt security.
In DMFAS, index type are implemented as an open list of values; that is, a list that is custom-
ized by the DMFAS administrator or database administrator.
Examples of indexes types are:
• Consumer Price Index
• Commodities Price Index
• Wholesale Prices Index
• Service Price Index
• Retails Price Index
• Rate of Growth of GDP
• Variation of Wage Index
• Cost of Construction Index
Projects
This reference file lets you define projects, which are the goods or services to be financed by a
given agreement.
Once you record a project, you can then select it in the Allocation window of a tranche (loan),
series (debt security) or grant. In this way, you can create a link between a loan, debt security
or grant and the projects to be financed. This is useful for compiling and keeping track of the
projects financed by various agreements.
PART 2
Registering Frame Agreements
74
Registering General Agreements
About
About this
this chapter
chapter
is a generaltoagreement?
DMFAS
What

Revolving general agreements

Using the fields in the window
76 Part 2 Registering Frame Agreements
About the General Agreements module ................................................................................77
How to access general agreements ...................................................................................................... 77

What is a general agreement? ............................................................................................................. 77
Revolving general agreements ............................................................................................................ 78
How the window is organized ............................................................................................................... 79
About the General Agreements module

This module is designed for the capture of data about general agreements that cover several
individual instruments. You can set up a link between a general agreement and the agree-
ments arising from it. The order in which you register the agreements does not matter.
HOW TO ACCESS GENERAL AGREEMENTS

 From the Portal, click General Agreements.
WHAT IS A GENERAL AGREEMENT?

A general agreement is a document that serves as a legal record of the highest level of agree-
ment between two parties, very often a debtor and a creditor. There are various types of gen-
eral agreements of which the most common are frame agreements as well as those relating to
a reorganization. Accordingly, general agreements can take one of two forms:
• Frame agreements which can be the possible financial source of instruments. When
such an agreement refers to both loans and grants, it is also called a “mixed agree-
ment”.
• Agreed minutes pertaining to the reorganization of existing instruments.
A general agreement can cover a number of related credit agreements.

REVOLVING GENERAL AG RE EMENTS

In DMFAS you can register a general agreement that integrates a revolving facility.
Common elements in a revolving general agreement and revolving credit

Both are governed by an agreement which provides the borrower with the right to draw vari-
ous times the repayments made before a specified availability date from accounts opened for
that purpose.
Each redrawing constitutes a new disbursement and each repayment of principal constitutes
a new commitment (the terms of which are specified in the original agreement). Revolving
credit in time is available for a specific amount every week or month or year until expiry
regardless of whether any amount was drawn in the preceding time period. Such credit can
be non-cumulative or cumulative, namely, unused portions can be carried forward to be used
in the next period.
Difference between a revolving general agreement and a revolving credit

For a revolving credit, the revolving conditions apply to the loan level whereas for a revolv-
ing general agreement the revolving conditions apply to the level of fund(s) specially created
for that purpose. The general agreement provides for one or several revolving funds that will
finance one or more individual loans.
For more information on the use of revolving credit at the loan level, refer to Chapter 8,
“Registering Revolving Credit”.
Specific fields and windows for revolving general agreements

The General Agreement window contains two fields specific to revolving facilities: Currency
and Amount. It also features a dialog box from which you can define the terms for the revolv-
ing facility.
HOW THE WINDOW IS OR GANIZED

This window consists of six tabs:
• General Agreement is used to record and update data relating to the general agree-
ment. Note that it is possible to register a general agreement that integrates a revolving
facility.
• Financing Allocation is used to record the type of debt or agreement which is the
object of the allocation; from here you can go to the Amount History dialog box.
• Financed Projects is used to identify the project which is the object of the general
agreement.
• Other Participants lets you record participants in the agreement other than the main
creditor and debtor.
• Fund Sources is used only for revolving general agreements. It lets you record the
revolving terms of a specific fund that will be the financial source of one or more indi-
vidual loans. This tab leads to a dialog box called Historical Data.
• Notes is a tab that provides you with a space in which you can enter any notes, com-
ments or observations you wish to record regarding the general agreement.
PART 3
Registering Loans
82
An Introduction to Loans
About
About this
this chapter
chapter
An
to DMFAS
concept of loans and tranches

DMFAS options for managing loan tranches

Currency pool loans
Syndicated loans
84 Part 3 Registering Loans
The concept of loans and tranches ........................................................................................85
DMFAS options for managing loan tranches .........................................................................85
How to choose between tranche management options 2 or 3 ............................................................... 89
About currency pool loans ...................................................................................................91
What is a currency pool? ...................................................................................................................... 91

What is a currency pool loan? .............................................................................................................. 91
How DMFAS handles currency and non-currency pool loans ................................................................. 91
About syndicated loans ........................................................................................................92

The concept of loans and tranches
The concept of loans and tranches

What is a loan?
A loan is a legally binding document which makes a specific value of funds available for dis-
bursement to a borrower. The amount disbursed is to be repaid according to the terms set out
in a repayment schedule or a promissory note. This is legal evidence of an agreement to lend
once certain preconditions have been met.
What is a tranche?
In DMFAS, a “tranche” is the system’s independent “information management unit” having
its own base currency, its future disbursements (which are automatically updated when a real
disbursement takes place) as well as the interest payments and the principal repayments
scheduled.
In a loan, a tranche is a set of disbursements the repayment of which is under their own spe-
cific financial terms. A tranche represents a distinct part of a loan as defined by the creditor in
the detailed payment schedule sent to the debtor. Each individual amortization defined by
the creditor is represented by the individual tranche in the system.
D M FA S o p t i o n s f o r m a n a g i n g l o a n t r a n c h e s
For each loan, you must determine its structure. DMFAS offers three different options for
managing tranches manually or automatically:
• Option 1: one tranche
• Option 2: unknown number of tranches
• Option 3: multiple known tranches
Option 1: One tranche

This option has the following characteristics:
• Only one tranche will be created; all drawings will belong to this tranche.
• The base currency of the tranche will be the same as that of the loan.
This is the most frequently used option for managing tranches since most loans contain only
one tranche in which drawings and repayments are always expressed in the loan currency.
You create the tranche yourself.
EXAMPLE
The following is a typical example of a loan with only one tranche. It shows the standard pro-
visions of an IDA loan (1st column) and summarizes its characteristics (2nd column).
Credit Agreement of the International Development Association (IDA)
Credit Agreement Loan amount in SDRs

The Association agrees to lend an amount in various currencies
equivalent to two million of Special Drawing Rights (SDR 2,000,000).
IDA General Conditions Drawings in various

Section 4.01. Currencies in which Withdrawals are currencies
to be Made
Except as the Borrower and the Association
shall otherwise agree, withdrawals from the
Credit Account shall be made in the respective
currencies in which the expenditures to be
financed out of the proceeds of the Credit have
been paid or are payable (...)
Credit Agreement Loan with one tranche

The borrower shall repay the principal amount in semiannual because only one
installments payable on each 15 May and 15 November, amortization schedule:
commencing 15 May 2010 and ending 15 November 2039. Each
installment up to and including the installment payable on 15 1. Only one principal
November 2019 shall be one percent of such principal amount, and schedule (same reim-
each installment thereafter shall be two percent of such principal bursement dates, two
amount. principal payment profiles,
1% of loan amount from
IDA General Conditions 15/05/2010 to 15/11/2019
Section 4.03. Amount of Repayment and 2% of loan amount from
The principal amount of the Credit repayable 15/05/2020 to 15/11/2039),
shall be the equivalent (...) of the value of the
currency or currencies withdrawn from the
Credit Account expressed in terms of Special
Drawing Rights as of the respective dates of
withdrawal.
Credit Agreement 2. Principal schedule

The borrower shall pay to the Association a service charge at the rate expressed in the loan
of three-fourth of one percent (3/4 of 1%) per annum on the currency (SDR),
principal amount of the credit withdrawn and outstanding. Service
charges shall be payable semiannually on 15 May and 15 November 3. Only one interest rate
each year. (same payment dates)
The currency of the United States of America is hereby specified for

the purposes of Section 4.02 of the General Conditions
IDA General Conditions Currency of reimbursement:

Section 4.02. Currencies in which Principal and USD
Service Charges are Payable
(a) The Borrower shall pay the principal
amount of, and service charges on, the Credit
in the currency specified in the Development
Credit Agreement for the purposes of this
Section or in such other eligible currency or
currencies as may from time to time be
designated or selected pursuant to paragraph
(c) or (e) of this Section (...)
DMFAS options for managing loan tranches
Option 2: Unknown number of tranches

This option has the following characteristics:
• The number of tranches remains unknown until the loan has been fully disbursed.
• DMFAS assists in the creation of new tranches whenever real drawings take place.
• This option uses a special tranche (tranche 0) which enables DMFAS to follow up the
undisbursed amount of the loan and to manage estimated drawings. You create
tranche 0 yourself.
• The currency of tranche 0 corresponds to the loan currency and the total amount of its
estimated drawings is always equal to the undisbursed amount of the loan.
The graphic below describes how DMFAS manages tranches and handles tranche 0 with
option 2.
When you register a new loan and select tranche management option 2, you need to create
tranche 0 and records its principal and interest terms. You can then confirm the calculation
method that DMFAS uses by default to create estimated drawings (“automatic quarterly”) or
select another one. DMFAS creates estimated drawings equivalent to the loan amount.
As real drawings are recorded, you must indicate the tranche where they belong (a tranche
other than 0), which may lead to the creation of a new tranche (for example, if an amount in a
new currency is drawn). Recording a real drawing in any existing or new tranche causes
DMFAS to recalculate the estimated drawings for tranche 0 and the undisbursed amount of
the loan.
EXAMPLE
The following is a typical example of a loan with an unknown number of tranches.
Loan Agreement of the African Development Fund
Characteristics of the loan agreement (loan contract and general

conditions)
ADF loans are approved in Units of Account (UA). Loan amount in UA
ADF loans are disbursed either in the respective currencies in which Drawings in various
the cost of goods and services have been paid or are payable, or in currencies
such other currency or currencies as the Bank shall from time to time
determine.
Amortization and Grace Periods Drawings in various

currencies
ADF loans have final maturities of up to 50 years including a 10-year
grace period. For project loans, 10% of the loan is repaid in the 10
years following the grace period and the remaining 90% over 30
years.
Principal Installment Loan with unknown number

of tranches because one
The determination of principal installment due is based on the amortization table per
particular currencies disbursed and outstanding. currency:
The amount due in respect of a particular currency is determined by 1. Principal schedules based
dividing the outstanding currency balance less any arrears on on the currencies used for
principal, at the time of billing, by the number of installments drawings.
remaining.
Service Charge 2. The service charge is

calculated for each currency.
A service charge of 0.75% per annum is levied on the disbursed and
outstanding currency balances of the loan. The service charge is
calculated based on the currencies disbursed and outstanding
during the billing period. The amount payable in any billing period
is determined by applying the appropriate percentage rate to each
individual currency balance.
ADF applies a system of billing in currencies, by equating currencies Currency of

repaid with those disbursed. reimbursement=
currency of disbursement.
DMFAS options for managing loan tranches
Option 3: Multiple known tranches

You can use this option whenever you:
• know the number of tranches ahead of time
• wish to distribute estimated drawings in the tranches where they actually belong
rather than group them in tranche 0 (management option 2).
With option 3, you create the tranches yourself by defining the disbursement profile and
amount of each tranche. DMFAS then handles the distribution of the undisbursed amount in
each tranche as theoretical drawings.
If you choose this option and the tranches are in different currencies, DMFAS does not check
that the total of tranche amounts is equal to the total loan amount until the loan has been fully
disbursed.
HOW TO CHOOSE BETW EEN TRANCHE MANAGEMENT OPTIONS 2 OR 3

For a minority of loans, you need to use tranche management option 2 or 3 since each draw-
ing or set of drawings results in the creation of a new tranche. The characteristics by which
you can identify these loans are as follows:
• The drawings and the repayments are effected in different currencies; and/or
• Each drawing or set of drawings has its own repayment terms.
For these loans, use the criteria below to determine which option (2 or 3) is a more appropri-
ate choice:
• If you know in advance the number of tranches and the amounts to be drawn in each
tranche, you’ll probably decide to create the tranches yourself with option 3.
• If you do not know in advance how the drawings are to be distributed among the dif-
ferent currencies, choose option 2. In this way, DMFAS will assist you in creating the
new tranches by applying the principle of n+1.
Historical loans: number of tranches known

Option 3 is applied to record historical loans totally disbursed at the cut-off date. For such
loans, the number of tranches may have been unknown at the time of signature. However,
the number of tranches can be determined once the loan is fully disbursed.
Tranche management option 2

By keeping all estimated drawings in one tranche until the loan has been fully disbursed,
option 2 spares you from having to record the details for each tranche until they are defini-
tive; the system itself takes care of this. This allows you to print out the aggregate projections
for the loan. By creating individual tranches as real drawings take place, DMFAS allows you
to benefit from more accurate information on amortizations at an early stage.
Tranche management option 2 is used for credit made up of several drawings where each
drawing or group of drawings has its own repayment schedule. This option is typically used
to handle supplier credit for which each delivery of goods or services generates its own pay-
ment schedule (beginning a specified number of days after the actual date of delivery) and
for which the amount and disbursement dates are not known ahead of time.
This option is typically used to handle credit from the Asian or African Development Fund,
which is drawn and reimbursed in various currencies. In this case, a group of drawings in a
given currency should form one tranche; however, the total amount drawn within each group
cannot be known in advance.
Loans from Paris Club renegotiation

For some loans arising from a Paris Club reorganization, the total loan amount is not
known in advance. For these loans, even if the number of tranches is known, it is
recommended to use option 2. An example is a loan financing a rescheduling of interest
with variable rates: the amount can only be estimated and the final amount will be known
only after variable rates have been applied. Once you know the final amount, you modify
the loan amount and DMFAS automatically adjusts tranche 0, without having to modify
tranches.
Tranche management option 3

With tranche management option 3, theoretical drawings are distributed over a number of
tranches which is already known at the time of signature of the agreement. DMFAS distrib-
utes these theoretical drawings in the tranches where they will eventually take place. Option
3 can thus be thought of as option 1 with several schedules.
Unlike option 2 where the amount of each tranche is not known at the time of signature of the
agreement and where, consequently, the different tranches cannot be created at that time, if
you use option 3 you must be able to determine the amount of each tranche and record it.
Based on the amount of the tranche, DMFAS calculates the estimated drawings for each
tranche.
Although not very common, the structure of option 3, applies to cases where a project is
financed by a single credit and consists of several components executed in parallel or one
after the other. The amount for each component has been established (up to a maximum
limit); each component has its own repayment schedule which usually takes into account the
expected ending date of its activities.
GUIDELINES
If you have to change the tranche management option selected, keep the following idea in
mind. You can always “move forward” with tranches as summarized below.
With this tranche

you can change the option to...
option
1 tranche Unknown tranches or known tranches
Known tranches Unknown tranches
However, you can only do this once. So be careful since it is very difficult to correct an
improper tranche structure once you have started.
About currency pool loans
About currency pool loans

WHAT IS A CURRENCY POOL?
The World Bank and regional development banks have set up a system which equalizes the
risk among all borrowers, at any one time, of fluctuations in the exchange rates of the curren-
cies disbursed and repayable on all bank loans included in the system.
Equalization results from pooling all the currencies disbursed and outstanding in the partici-
pating loans and from expressing the outstanding principal amount of every such loan as a
share of the pool. Loan service obligations on each participating loan are therefore related to
all amounts in various currencies disbursed and outstanding on all loans in the system.
WHAT IS A CURRENCY POOL LOAN?

Currency pool loans provided by the World Bank and regional development banks are multi-
currency obligations committed in U.S. dollar-equivalent terms. The currency amount dis-
bursed is converted into a U.S. dollar equivalent amount, using the applicable exchange rate
on the day of disbursement. The U.S. dollar equivalent amount is then divided by the pool
unit value on the day of disbursement to determine the pool units disbursed. The pool units
are what the borrower will have to repay. When pool units are to be repaid, they are con-
verted back into the dollar equivalent amount using the prevailing pool unit value.
HOW DM FAS HANDLES CURRENCY AND NON-CU RRENCY POOL LOANS

For loans not belonging to a pool, DMFAS requires, to a certain extent, a perfect match
between the scheduled maturities and the real operations of the loan in the system. DMFAS
does not accept real operations that deviate beyond a tolerance factor set by the database
administrator.
For loans which do belong to a currency pool system, real operations never match scheduled
ones exactly and, in some cases, may even vary perceptibly due to fluctuations in the compo-
sition of the different currencies in the pool or in the exchange rates between different curren-
cies. For this reason, with respect to currency pool loans, DMFAS allows the entry of real
operations that deviate from those scheduled.
About syndicated loans

DMFAS offers a facility to register syndicated loans, which lets you:
• Identify a syndicated loan as such
• Identify the lead manager and several main creditors
• Record the type of participation (or role) of each participant in the syndicate, at the loan
and/or tranche level
• Record the percentage or amount of participation of each participant in a given role
• Record the same participant with different roles
• Obtain automatically the information for the initial acquisition in the Share Trade dia-
log box.
In general, you record a syndicated loan the same way you would record any ordinary loan.
CAUTION
Do not confuse the lead manager with the agent bank. Although the same bank can play both
roles, the lead manager is recorded in the Participants tab of the General Information win-
dow while the agent bank is recorded in the Other Participants area.
The lead manager, also called the lead bank, is the bank which is given a mandate by a poten-
tial borrower to arrange a syndicated loan. It is responsible for negotiating the loan terms,
forming the syndicate which will organize the operation, preparing the memorandum that
presents the economic and financial situation of the borrower and the rest of the legal docu-
mentation needed. When a syndicate is composed of several lead banks, usually the bank
which received the mandate is considered as the principal lead bank.
About syndicated loans
The agent bank is the bank handling the administration of a loan in a syndication (receiving
fees, interest and capital payments for distribution to participating banks) and maintaining
the relationship between the borrower and the other participating banks. Most of the time,
the lead manager assumes the function of agent bank.
Tip
The total percentage for the role of “creditor/main creditor” must be 100% (or the total
amount must be equal to the loan amount). If you cannot enter all the creditors because the
information is not available or if you don’t want to enter creditors with a low level of
participation in the syndicate, create a new Participant reference file that you could call
“Other creditors in the syndicate”. You would then select this participant to complete the
information on the creditors in order to reach 100% of participation (or the total amount of
the loan).
Registering Loan Agreements
About
About this
this chapter
chapter
Loan Agreementsto DMFAS

Tranche Information

Principal and Interest Terms
Commissions
About the Loans module .....................................................................................................97
How to access ..................................................................................................................................... 97
The General Information window ..........................................................................................98
The Agreement Info 1 tab .................................................................................................................. 98

The Agreement Info 2 tab ................................................................................................................. 100
The User Info tab .............................................................................................................................. 103
The Other Classifications tab ............................................................................................................. 103
The Notes tab ................................................................................................................................... 103
About tranches ..................................................................................................................104
How to access tranches ...................................................................................................................... 104

Where to get information for tranches ................................................................................................ 104
Action to be taken once tranches are recorded or modified ................................................................ 104
The Tranches window .........................................................................................................105
The Tranches Info tab ......................................................................................................................... 105

The Estimated Drawings tab ............................................................................................................... 106
The Interest tab ................................................................................................................................. 114
Special case: “last-day” interest calculations ...................................................................................... 117
The amortization Table tab ................................................................................................................. 119
About Commissions ............................................................................................................120
How to access commissions ................................................................................................................ 120

Regular and irregular commissions .................................................................................................... 121
Instrument or tranche level commissions? ........................................................................................... 121
Commission types ............................................................................................................................. 122

About the Loans module
About the Loans module

The Loans module is one of the key modules in DMFAS. It is used to register and update all
types of loan agreements.
In terms of structure, the module consists of three windows which in turn are made up of a
number of tabs, as shown below.
Window Tabs
General Information Agreement Info 1, Agreement Info 2, Participants, User

Info, Other Classifications, Notes, Attachments
Tranches Tranches Info, User Info, Estimated Drawings, Principal,

Interest, Amortization Table
Commissions Terms, Payment Schedule
For any loan agreement, you need to fill in the General Information window where you
record all the basic information about the loan agreement such as different references, the sig-
nature date and the availability date. You also define the loan’s tranche structure and partici-
pants (borrowers, lenders, guarantors, beneficiaries, etc.) at this level.
In addition, the Tranches window is where you must record all the data relating to the
tranches of a loan. The “tranche” is the system’s autonomous entity, having its own base cur-
rency, its estimated drawings (which are automatically updated as real drawings take place)
as well as scheduled interest and principal payments. Using this information, DMFAS auto-
matically calculates amortization tables.
Finally, you record the loan’s commissions and fees in a separate window since you can enter
this information at both the loan and tranche levels.
NOTE
Some classification fields (Agreement Type, Financing Type and Credit Terms) available in
DMFAS 5.3 in the Tranches window have been moved to the General Information window in
DMFAS 6.
HOW TO ACCESS
 From the Portal, select Loans. From the left panel, select Loans > General
Information.
The General Information window provides access to the tabs and dialog boxes described in
the next sections.
The General Information window

The General Information window lets you record the basic details about a loan agreement
such as the creditor, debtor, the loan ID , the date of signature as well as the classification of
the instrument according to several criteria. You enter more specific information such as the
principal and the interest terms in the Tranches window.
THE AGREEMENT INFO 1 TAB

The Agreement Info 1 tab lets you record basic information about the loan agreement includ-
ing identification, dates, the amount and authorization.
This tab also provides access to the dialog boxes described below.
The Status History dialog box

The Status History dialog box is used to consult all the status changes of a loan throughout its
life cycle. Status changes are recorded directly by modifying the field. A dialog box called
Modifications appears prompting you to indicate whether the change is a correction or an
amendment.
The Amendment History dialog box

The Amendments History dialog box is used to consult all the various amendments to a loan
which may relate to a change in the amount, the effective limit date or the drawing limit date.
When you modify one of these fields, a dialog box called Modifications appears prompting
you to indicate whether the change is a correction or an amendment. For loans with capital-
ized interest, DMFAS creates an amendment to the loan amount at the capitalization dates.
The Conditions for Effectiveness dialog box

The Conditions for Effectiveness dialog box is used to record all the conditions to be fulfilled
in order for a loan to become effective.
The Share Trade dialog box

The Share Trade dialog box is used for a syndicated loan to record the percentage of shares
allocated to each member of a syndicate. DMFAS can display this information automatically
provided that you have recorded the relevant information. It also makes it possible to record
share movements on the secondary market.
The Associated Fund dialog box

The Associated Fund dialog box is used to link a fund with a loan arising from a revolving
general agreement and to specify the amount of the loan financed by that fund. For more
information on this subject, refer to Chapter 5 of this guide.
The Revolving Terms dialog box

The Revolving Terms dialog box is used to record the terms of a revolving credit. For more
information on this topic, refer to Chapter 8 of this guide.
RECOMMENDATION
Once you’ve recorded all the general information for a loan, be sure to print out the loan
information sheet to check all the data you entered. To do so:
 From the left panel, point to Tools, then Loan Information Sheet and then
click one of the report formats (pdf, HTML, xls (Excel) or doc (Word).
You should then file the resulting report with the loan agreement for future reference.
A loan information sheet in PDF format.

THE AGREEMENT INFO 2 TAB

The Agreement Info 2 tab allows you to enter other general characteristics about the loan
such as its classification, use of resources, concessionality and tranche management option.
What is external debt?

The gross external debt is the amount, at any given time, of disbursed and outstanding con-
tractual, and not contingent, liabilities that residents of a country owe to non-residents and
that require payment of the principal, with or without interest, or payment of the interest,
with or without principal.
What is domestic debt?

The gross domestic debt is the amount, at any given time, of disbursed and outstanding con-
tractual, and not contingent, liabilities that residents of a country owe to other residents of
the country and that require payment of the principal, with or without interest, or payment of
the interest, with or without principal.
What is debt assumption?

The assumption is a trilateral agreement between a creditor, a former debtor and a new
debtor under which the new debtor assumes the former debtor’s outstanding liability to the
creditor and is liable for repayment of the debt.
After it has been assumed, the debt, which was originally a liability of the former debtor,
becomes a liability of the new debtor. The debt may carry the same terms as the original debt,
or new terms may come into force because the guarantee was invoked. An example of debt
assumption could be a government taking over the debts of a corporation.
The Purpose and Purpose Details field

The Purpose field in DMFAS 5.3 has been broken down into two fields in DMFAS 6:
• the Purpose field which provides the first level of classification
• the new Purpose Details field (optional) which provides the second level of classifica-
tion
In the second level of classification, DMFAS shows only the values corresponding to the first
selection.
Economic sector
The Economic Sector field was moved from the Tranche Allocations sub-window in DMFAS
5.3 to the General Information and Tranches windows in DMFAS 6. The list of values for this
field has also been changed.
You now enter the economic sector only once at the general information level; DMFAS auto-
matically copies it to the tranche level. However, if the tranches of the loan are to be allocated
to different sectors, then select the code “Multi-sectors” which allows you to associate each
tranche with a specific economic sector.
To classify instruments by economic sector, DMFAS 6 uses codes representing economic activ-
ities. This hierarchical list consists of 21 sections broken down by divisions, groups and
classes. The new list of values for the Economic Sector field is based on the International Stan-
dard Industrial Classification of All Economic Activities (ISIC).
The list of values for the Economic Sector field.

The difference between Economic Sector and Purpose

Purpose describes the immediate use of the loan while economic sector refers to the sector of
destination of the loan.
EXAMPLE
A loan is granted to finance the construction of houses for workers in a sugar cane estate.
• Purpose = project financing
• Purpose Details = construction of buildings
• Economic Sector = agriculture
Instrument classification
A new instrument classification was introduced in DMFAS 6. It applies to all debt instru-
ments in DMFAS 6: loans, debt securities and sukuk.
The fields Agreement Type and Financing Type used in DMFAS 5.3 were replaced by three
fields in DMFAS 6: Group, Type and Name.
Classification fields were moved from the Tranches level to the General Information level:
this avoids repeating the same data entry for each tranche.
The reason for the change in classification was to adhere to internationally accepted stan-
dards for debt instrument classification (the External Debt Statistics Guide of the IMF); and to
have an exhaustive and mutually exclusive list of instruments.
How to use the fields

1 Select a value in the Group field.
For example, loans
2 Select the type of instrument.
3 DMFAS filters the codes based on the group you selected.
4 The Name field changes accordingly.
It is based on a customized list of values specific to an institution.
THE PAR TICIPANTS TAB

The Participants tab is where you record data relating to the main participants in the agree-
ment and other participants. Here you can also record information on syndicated loans.
THE US ER I NFO TAB

The User Info tab consists of numerous fields for the customization of codes, fields and dates.
THE OTHER CLASSIFICATIONS TAB

The Other Classifications tab consists of fields relating to on-lent loans as well as the institu-
tion that pays the debt service.
THE NOTES TAB

The tab provides you with a space in which you can enter any notes, comments or observa-
tions you wish to record regarding the loan. Feel free to enter as much detailed information as
you like.
THE ATTACHMENTS TAB

In this tab, you can insert a file or document to be stored with the loan. This means that when
you retrieve the instrument, you will have access to this file or document. For example, you
can attach any of the following:
• a Word document
• an Excel spreadsheet
• a PDF file
• a simple text file
About tranches
Because tranches are autonomous units, you must record the data, tranche by tranche. Once
you’ve finished working on one tranche, save the data you entered before continuing with
another tranche.
HOW TO ACCESS TRANCHES

 From the Portal, select Loans, then from the left panel, select Loans >
Tranches.
WHERE TO GET INFORMATION FOR TRANCHES

A loan agreement may be accompanied by an amortization table provided by the creditor.
This amortization table contains the dates and amounts of all the principal payments as well
as the dates of interest payments. It may also include certain fee or commission payments.
Even if the creditor does not provide such a table, the agreement will always contain the
information necessary to create one.
ACTION TO BE TAKEN ONCE TRANC H E S ARE RE CORDE D OR M ODI F IE D
Calculate the amortization table

Because DMFAS does not automatically update the amortization table after you enter or
change data, you must launch the calculation yourself via the Amortization Table tab.
Update the loan_tranches table

It is important to update the loan_tranches table in the database by selecting Utilities >
Update Table for User-defined Rpts, once you’ve recorded all the data. In this way, DMFAS
updates the tables used for the production of user-defined reports.
RECOMMENDATION
Once you’ve recorded all the information for a tranche, be sure to print out the tranche infor-
mation sheet to check all the data you entered. You should then file this report with the loan
agreement for future reference.
The Tranches window
T h e Tr a n c h e s w i n d o w
You should use the Tranches window only after recording data for a given loan in the General
Information window where you have defined the tranche management option.
THE TR ANCHES INFO TAB

The Tranches Info tab is where you enter basic information about a specific tranche such as
its amount and currency. The tab also provides access to the dialog boxes described below.
The Tranche Participants dialog box

The Tranche Participants dialog box is used to record participants in the tranche and to indi-
cate their role in that specific tranche. You record at the tranche level only participants whose
role is not the same for all the tranches of the loan. Similarly, in the case of a syndicated loan,
you enter at the tranche level, participants whose share in the loan is not the same for all
tranches.
The Project Allocations dialog box

The Projects Allocations dialog box is used to record the amount of tranche allocations to spe-
cific projects. This dialog box is not activated for tranche number 0.
The Business Day Conventions dialog box

A business day convention refers to the rule for adjusting a payment date if the date falls on a
day that is not a business day; for example, a holiday. Such a payment date may be associated
with a payment of principal, interest or commission.
In this dialog box, you can assign a business day convention to both the principal and interest
payment dates associated with the tranche. For interest payment dates, you can also specify
whether the interest amounts are to be recalculated based on the modified dates.
The Fund Details and Usage dialog box

The Fund Details and Usage dialog box lets you record or update the details of an allocation
amount to a project or programme. It is used specifically with local government debt which is
covered extensively in Chapter 9 of this guide.
The Reference for DSM+ dialog box

The fields in this dialog box relate to the facility in DMFAS for exporting data to DSM+ (Debt
Sustainability Model Plus). It is no longer supported by the DMFAS Programme.
THE ESTIMATED DRAWINGS TAB

This tab is used to record and update estimated drawings for a tranche. Estimated drawings
are used to calculate the amortization table. Note that this module is intended for estimates
only; you record real drawings in another module (Mobilization > Loan Drawings).
What are estimated drawings?

A drawing is the placement of resources such as goods, services or funds at the disposal of
the borrower or beneficiary country taken against a loan agreement.
Estimated drawings are also known as scheduled drawings. They represent the assumptions
you initially made while registering a loan agreement.
From the point of view of the borrower, a “drawing” is the same thing as a “disbursement”.
In this guide, these terms are used interchangeably.
How are drawings estimated?

The quality of estimates depends on the data available to you at the time of registration.
Sometimes the drawings are estimated on the basis of preliminary data which is then cor-
rected if more accurate documents become available such as amortization tables or disburse-
ment notifications provided by the creditor.
Who should estimate drawings?

Whenever possible, drawings are estimated by the project manager or by the administrator.
The administrator can make a preliminary estimate which remains valid until the project
manager can provide a more accurate estimate.
How are estimated drawings updated?

In DMFAS estimated drawings are updated whenever real drawings are recorded.
Two methods for estimating drawings

DMFAS calculates estimated drawings based on two methods: either automatic or manual.
DMFAS applies by default the method “automatic quarterly”, but you can select another
automatic method or record drawings manually.
Default method
By default, DMFAS calculates estimated drawings by applying the method “automatic quar-
terly”. If you are satisfied with the estimates thus calculated, then you do not need to use this
tab since DMFAS generates estimated drawings whenever you record general information for
a tranche for the first time. In addition, DMFAS automatically recalculates estimates when-
ever real drawings are recorded or whenever changes are made to the tranche amount.
The Tranches window
The automatic calculation of estimated drawings

After registering a new loan and upon using the Estimated Drawings tab for the first time,
you’ll notice that DMFAS has already selected the “automatic quarterly” estimation method
by default.
With this method, DMFAS distributes the undrawn amount in a linear fashion by creating an
estimated drawing in the middle of each quarter; more specifically, between the date effective
(or latest real drawing date or roll-forward date—whichever is the more recent) and the
loan’s drawing limit date.
Likewise, regardless of the “automatic” method you choose (monthly, annual, etc.), DMFAS
will distribute estimated drawings by taking into account the selected periodicity, between
the date effective (or the latest drawing date or roll-forward date—whichever is the more
recent) and the loan’s drawing limit date.
Automatic method: how are estimated drawings distributed?

The automatic calculation causes amounts to be distributed in a linear fashion over the
disbursement period, based on the selected periodicity, and in the middle of the period
you selected.
NOTE
The table summarizes the way estimated drawings are handled by DMFAS based on the
tranche management option.
If the tranche management

then DMFAS...
option is...
1 (one tranche) distributes estimated drawings in tranche 1.
2 (unknown number of tranches) distributes the estimated drawings in tranche 0.
3 (multiple known tranches) distributes the estimated drawings into different

tranches.
Recording estimated drawings manually

You can also decide to record estimated drawings manually by setting the dates and amounts
yourself.
Real drawings will cause a partial update of manually estimated drawings so that at a given
moment, the total amount of estimated drawings is equal to the real undisbursed amount
available. The rules applied to adjust estimated drawings recorded manually are described in
the “The automatic adjustment of estimates” in this section.
Where to view estimated drawings?

You can view estimated drawings in the drawings column of the Amortization Table tab.
The automatic adjustment of estimates

If estimated drawings already exist for a tranche, DMFAS adjusts them automatically based
on whether their profile is automatic or manual.
Automatic profile
Adjustments are always based on the current undisbursed amount of the loan. DMFAS auto-
matically adjusts the estimated drawings as summarized below:
If the following is changed or

then DMFAS...
corrected...
Loan amount recalculates the estimates, if the tranche

management option is 1 (one tranche only) or if
the tranche number is 0.
Tranche management option recalculates the estimates in certain cases.
Date effective recalculates the estimates.
Drawing limit date recalculates the estimates.
Real drawings (entered or recalculates the estimates depending on the case:

changed) estimates dates and amounts may be modified.
Once a real drawing has been recorded, DMFAS automatically recalculates the undrawn
amount eliminating any estimated drawings prior to the real drawing’s value date. It then
updates estimated drawings and redistributes them over the period between the date of the
last real drawing and the drawing limit date.
The Tranches window
Manual profile
DMFAS automatically adjusts estimated drawings only in two cases:
• Real drawings are recorded or modified.
If you record a new drawing, DMFAS adjusts the estimates by deleting any estimates
prior to the new drawing date; it also re-adjusts the amounts of the remaining esti-
mates falling closest to the new drawing date. If you increase, decrease or delete any
previously recorded drawings, DMFAS adjusts the amounts of the earliest estimates.
Note that DMFAS deletes any estimated drawing equal to zero after an adjustment.
Adjustment rules when real drawings increase or decrease
An increase in estimated drawings due to a decrease in the real drawings

• If estimated drawings exist for a given tranche, the earliest existing
estimate will be adjusted (increased).
• If no estimated drawings exist for a given tranche (that is, the loan is
fully disbursed), an estimated drawing will be created on the day of
the adjustment.
A decrease in estimated drawings due to an increase in real drawings
Any decrease in estimated drawings will cause all estimated drawings with
scheduled dates earlier than the adjustment date to be deleted regardless of
whether the total amount of these scheduled drawings is larger or smaller than
the adjustment.
• If the total amount of estimated drawings before the adjustment
date is smaller than the adjustment amount, the earliest estimated
drawing(s) after the adjustment date will be reduced.
• If instead, the total amount of estimated drawings before the adjust-
ment date is larger than the adjustment amount, an estimated draw-
ing with an amount corresponding to the difference will be created
on the adjustment date. If this date coincides with the scheduled
date for an existing estimated drawing, the difference will be added
to the amount of this estimated drawing.
• The tranche management option is changed or corrected.

If you change the option from 2 to 3 or 1, then DMFAS deletes any estimated drawings
in tranche 0 along with the other data in the tranche.
Otherwise, DMFAS does not make an adjustment if you change or correct the loan amount,
the effective date or the drawing limit date.
This is because these operations entail a change to the contract itself. If you’ve chosen to man-
age estimates yourself, DMFAS has no way of knowing how to adjust them correctly—that is,
according to your own method. It is rare that you would make such changes and it is likely
that if DMFAS were to make automatic adjustments, not only would you have to readjust
them, but you would also have no trace of what you originally recorded.
Nonetheless, even if you select the manual profile, DMFAS assists you in ensuring that the
estimates are accurate. If you make “contract” changes, it informs you that manual estimates
may require changing. DMFAS also checks that the date of each estimate is within the dis-
bursement period and that the sum of estimated amounts is equal to the undrawn amount. In
case of errors, DMFAS notifies you so that you can view them in the Amortization Table
Errors report.
Modifying the estimation method

1 Go to the Estimated Drawings tab.
2 In the Estimation Method field, select the new method from the list of values.
3 Click OK.
A message appears: “Drawings successfully estimated”.
Switching from one automatic method to another

When you switch from one automatic method to another, DMFAS automatically redistributes
the estimated drawings based on the method you selected.
Switching from an automatic to manual method

DMFAS does not immediately distribute the estimated drawings created by the automatic
method previously applied. If you wish to change the data of individual estimated drawings
(for example, the dates or amounts), you must first be sure that the total amount of estimated
drawings is equal to the undrawn amount. If not, you will receive an error message while try-
ing to save your changes. You will then have to return to the estimated drawings and correct
them.
The estimated method automatically switches to the manual method if you change any infor-
mation such as dates or amounts. When you navigate from the field where you made the
change, DMFAS displays a message indicating the switch to the manual method. Once you
click OK, DMFAS begins to recalculate the estimated drawings. In this case, regardless of the
changes you made to individual drawings using the automatic method, DMFAS creates one
estimated drawing of the entire undrawn amount. It is therefore useless to modify the list of
drawings estimated via an automatic method as you will then have to record them one by
one.
Switching from a manual to automatic method

DMFAS erases all data recorded manually and redistributes the estimated drawings accord-
ing to the new method you selected.
Add or modify an estimated drawing

You can add estimated drawings or modify them only by using the manual method.
Thus, because the total amount of estimated drawings must be equal to the undrawn amount
at all times, adding or modifying a new estimated drawing implies reducing or adjusting the
amount of one or more existing drawings (or a change in real drawings).
Deleting an estimated drawing

You can delete estimated drawings only by using the manual method. In this case, you must
add one or more drawings to obtain a total equal to the undrawn amount; otherwise, DMFAS
displays an error message.
If you delete one drawing with the automatic method, DMFAS automatically switches to the
manual method and creates one estimated drawing equal to the total undrawn amount. You
must then adjust manually the dates and amounts of the estimated drawings in order to
obtain an amount equal to the undrawn amount.
The Tranches window
Roll forward estimated drawings

A feature in DMFAS allows you to update or roll forward estimated drawings up to a date
you specify. This feature improves projections by eliminating estimated drawings scheduled
prior to this date. It is based on the assumption that estimated drawings have not occurred
and will not occur and, consequently, should be deleted.
For regular estimated drawings (automatic method), DMFAS performs the calculation using
the start date you recorded and applying the method’s periodicity from that date on. For
irregular estimated drawings (manual method), DMFAS calculates the first drawing for the
date you choose.
To roll forward estimated drawings:
1 Select Utilities > Roll Forward Estimated Drawings.
2 Fill in the necessary fields, and click the Re-estimate button.
Click the Amortization Update Log tab to view the list of roll forward actions.
THE PRINCIPAL TAB

The Principal tab is used to record and update data relating to the principal terms of a
tranche such as the principal repayment schedule.
The update of the amortization table

The data you record or update in this tab is not applied to the amortization table until after
you calculate it from the Amortization Table tab or until after you click Save and Exit from
the Tranches tab.
Tranche management 2
Under tranche management option 2 (unknown number of tranches), the record of a real
drawing can result in the creation of a new tranche. However, DMFAS does not automatically
copy values for principal repayments; these you must record yourself because each tranche
contains several different elements with respect to the principal.
Principal repayment schedules

A tranche may have several periods (or schedules) for principal repayments usually combin-
ing a regular with an irregular schedule.
Regular schedules
A regular schedule contains several payments of equal amounts evenly spread out over the
same principal repayment period. More than one regular schedule can occur within the same
tranche but only if calculation method 10 or 71 is used.
Irregular schedules
An irregular schedule has only one repayment date and one amount. There can be several
irregular schedules within the same tranche. In other words, each irregular schedule corre-
sponds to one irregular payment.
Combining regular and irregular schedules

When regular and irregular schedules occur within the same tranche, you must place the
irregular schedule(s) just before or after the regular schedule(s).
The fields of the Payment Schedule group box of the Principal tab are filled in as many times
as there are different principal schedules. The arrow keys let you view the data for different
principal periods.
Delete a principal repayment schedule

You can delete a schedule from this tab only if it has no associated recorded payments.
Calculation methods in DMFAS

Calculation methods relating to principal in DMFAS are listed in the table.
Code Calculation Method
10 Equal principal payments
11 AKA/IDB equal principal payments
22 Annuity paid beginning of period
21 Annuity paid end of period
50 EIB adjusted annuity
60 IBRD adjusted annuity
70 Equal principal payments on new outstanding
71 Equal principal payments on latest outstanding
80 Interest on principal repayments

The Tranches window
Annuities
What is an annuity?
Annuities are a set of periodical payments at equal intervals of time and usually equal in
amount.
An amount has the particularity that the sum of principal repayments plus interest payments
is constant throughout the whole amortization period. Although the term “annuity” means
annual payments, the meaning has been extended to apply to payments at any regular inter-
vals.
Ordinary annuity and annuity certain

Payments, which represent the rent of the annuity, can be made at the beginning or at the end
of the payment intervals (i.e. the duration of time between consecutive payments.) The latter
case is called an ordinary annuity whereby the first payment is made at the end of the first
period and the last payment is made at the end of the last period. A so-called “annuity cer-
tain” is an annuity for which payments begin and end at fixed dates.
The Payment Schedule Calculator

DMFAS calculates automatically the start date of the principal schedule by adding the Num-
ber of Days to the Start Reference Date you recorded. This is a useful feature when the loan
agreement indicates that the first payment will take place a certain number of days after the
loan signature.
Similarly, it calculates automatically the end date of the principal schedule by adding the
Number of Days to the End Reference Date.
If you entered directly the first payment date and the last payment date of the principal
schedule in the Principal tab, they will be displayed in the Payment Schedule Calculator.
The Amendments History dialog box

See the explanation in the section of this chapter on the Interest tab.
THE INTERE ST TAB

The Interest tab is used to record fixed and variable interest rates and their payment sched-
ules. It is also used to record a penalty interest rate that is simply calculated as an addition to
the normal interest rate.
The update of the amortization table

The data you record or update in this tab is not applied to the amortization table until after
you calculate it from the Amortization Table tab or until after you click Save and Exit from
the Tranches tab.
Tranche management 2
Under tranche management option 2 (unknown number of tranches), the record of a real
drawing can result in the creation of a new tranche. However, DMFAS does not automatically
copy values for interest terms; these you must record yourself because each tranche contains
its own elements with respect to the interest.
The Tranches window
Rates Application
For any tranche there can be several interest rates, either fixed or variable.
A variable interest rate is computed by adding a spread to a predetermined base rate, which
is a recognized and published rate (for example, 1.25% over LIBOR).
The spread of a variable rate is recorded in the interest terms of a given tranche. For the float-
ing rate to be used as a base rate, DMFAS gives you the possibility to record:
• floating rate values that will apply to all loans/tranches associated with that rate
• different values of this same rate for a given tranche
Recording floating rates with values common to all loans/tranches

A window, not part of this module, facilitates the entry of floating interest rates with values
“common” to all loan/tranches. Instead of recording this data repeatedly on a tranche by
tranche basis, it is recommended to use the Common Interest Rates reference file to define the
values of each floating rate.
By default, DMFAS applies these values to all the loans/tranches associated with the same
interest rate.
Recording floating rate values specific to a tranche

You can also specifically record a different floating rate value for a given tranche via the Float-
ing Rate Values dialog box (accessible from the Rate Values link); in this case, DMFAS uses
this value instead of the one recorded in the Common Interest Rates reference file.
For more information about the Common Interest Rates reference file, see Chapter 4.
Interest payment schedule

For any tranche, there can be several interest periods (or schedules).
Regular and irregular schedules

A regular schedule contains several interest payment dates spread out evenly throughout the
duration of the period. The amount of each payment can be calculated by a mathematical for-
mula.
An irregular schedule has only one interest payment date and one amount.
For annuities, you do not need to indicate an interest payment schedule.
Multiple regular schedules

A tranche may have several regular schedules. When this happens, you can use the arrow
keys to view the other regular interest periods.
Delete an interest schedule

You can delete a schedule from this tab only if it has no associated recorded payments.

The Payment Schedule Calculator is an optional facility that helps you with the calculation of
the start and end dates of the payment schedule.
The Special Conditions dialog box

This dialog box is a facility made up of two distinct parts: the first part lets you defer interest
payments while the second part allows you to set up capitalized interest for a given interest
schedule.
Capitalized interest is explained in Chapter 21.

The Amendment History dialog box is used to consult the amendments to a tranche resulting
from a change or deletion in financial conditions relating to principal, interest or commission.
When you modify certain fields in the:
• Principal tab
• Interest tab:
- the Rates Application group box
- the Payment Schedule group box
- the Special Conditions dialog box
- the Partial Capitalization dialog box
- the Other Penalty Rates dialog box
• Commissions tab
... DMFAS prompts you to indicate whether the change is a correction or an amendment. If
you select amendment, click the Reason button, enter a brief explanation for the amendement
and click Save.
To view the amendment recorded, click the Amendment History link where you made the
change or deletion. A read-only dialog box then appears showing the details of the amend-
ment.
NOTE
In order for this function to work, a parameter called Enable Financial Amendments must be
activated in the Control Panel.
The Other Penalty Rates dialog box

This Other Penalty Rates dialog box is used if the penalty rate is not simply in addition to the
normal interest rate (in which case it is simply recorded in the main tab). This dialog box
affords considerable flexibility and accuracy in determining the “unusual” penalty rates as
well as variable penalty rates. You can use this dialog box whenever:
• There is more than one penalty rate.
• Penalty rates are variable.
If for a variable penalty rate you want to use as the base rate a floating rate with values
different from the common values recorded in the Common Interest Rates reference
file, then you enter these values in the Rate Values (Penalty Interest) dialog box, called
from the Rate Values link.
• Penalty rates are calculated on an annual basis different from the one specified in the
Year field and/or on a monthly basis different from the one specified in the Month
field. For example, in a loan contract the penalty rate is based on 360 days as opposed
to 365 days for the normal interest rate.
• The conversion factor of penalty rates is not daily.
Tip
If the late interest rate is the same as the normal rate, enter 0 in the Penalty Rate field.
The Tranches window
SPECIAL CASE: “LAST-DAY” INTERE ST CALCULATIONS

The Central American Bank for Economic Integration (CABEI) calculates interest that takes
into account not the first day of the application period but rather the last day (that is, the day
of the payment). Taking into account the standard practice, DMFAS does the reverse.
Payments Interest Rate The CABEI application Days DMFAS application Days
1/3/98 7.5% 2/3/98 - 30/6/98 121 1/3/98 - 30/6/98 121
7.5313% 1/7/98 - 1/9/98 63 30/6/98 - 31/8/98 63
1/9/98
If application dates that are the same as those of the CABEI are recorded in DMFAS, the inter-
est calculated in DMFAS will not match that of the CABEI. Because it does not consider the
payment day, DMFAS will calculate interest at the rate of 7.5313% from 1/7/98 to 31/8/98,
that is, over a period of 62 days, as shown below:
Rates/Months CABEI days DMFAS days
7.5%
2/3/98 - 30/6/98 2/3/98 - 30/6/98
March 30 30
April 30 30
May 31 31
June 30 30
Total 121 121
7.5313% 1/7/98 - 1/9/98 30/6/98 - 31/8/98
July 31 31
August 31 31
September 1 0
Total 63 62
Given that the payment day cannot be modified, in order for the rate of 7.5313% to be applied
to the same number of days, one must add one day to the beginning of the application period
for this rate; thus 30/6/98 in the example. Under these conditions, the application period of
the previous rate (7.5%) is shifted by one day.
Rates/Months CABEI days DMFAS days
7.5%
2/3/98 - 30/6/98 1/3/98 - 29/6/98
March 30 31
April 30 30
May 31 31
June 30 29
Total 121 121
7.5313% 1/7/98 - 1/9/98 30/6/98 - 31/8/98
June 0 1
July 31 31
August 31 31
September 1 0
Total 63 63
To summarize the above example:
The start of the DMFAS = the start of the CABEI application period - 1 day
application period
The end of the DMFAS = the end of the CABEI application period - 1 day
application period
CAUTION
This practice applies to the entire amortization table. It requires recording an interest rate of 0
on the day of the last payment minus 1.
The Tranches window
THE AMOR TIZATION TABLE TAB
What is an amortization table?

An amortization table refers to the schedule for the repayment of principal and payment of
interest to pay off a debt instrument by maturity. In DMFAS, the amortization table lists not
only scheduled principal repayments and interest payments but also scheduled (or esti-
mated) drawings and capitalized interest, if any.
The amortization table also lets you view real operations, based on real drawings and debt
service operations in the Mobilization and Debt Service modules. Real operations are indi-
cated by an asterisk (*).
The tab allows you to :
• consult the amortization table
• (re)calculate the amortization table
• refine or round off scheduled principal and interest amounts in the amortization table.
RECOMMENDATION
Because a new calculation may take time, it is best to use the Calculate button only after
you’ve recorded all important changes, excluding rounding corrections, during your session.
If you make rounding adjustments and then recalculate the table, you may then lose them!
Once you have regenerated the table by pressing the Calculate button, DMFAS displays a
message informing you whether the calculations were successful. If any errors occurred, you
can view them in a report.
About Commissions
The Commissions window is divided into two tabs: Terms and Payment Schedule.
The Terms tab is used to record or update data relating to the commission terms of a loan
agreement. These include a budget line(s) as well as regular or irregular payments. You can
record this data at either the loan or tranche level.
In addition, you can use this window to enter all types of fees (for example, management or
commitment fees). In this chapter, the term “commission” includes the notion of fees.
HOW TO ACCESS COMMI SSI ONS

 From the Portal, click Loans and from the left panel, click Commissions.
About Commissions
REGULAR AND IRRE GULAR COMMISSIONS

The tab is divided into two parts: the upper part is for regular commissions; the lower part is
for irregular commissions.
Regular commissions
Regular commissions are commissions in which the intervals between payments are identi-
cal; their amounts can be calculated by a mathematical formula.
In general, you enter a specific type of regular commission only once per tranche or loan.
However, it is common to find several types of regular commissions by loan or tranche.
Irregular commissions
An irregular commission is any commission in which payments are made at uneven intervals
and which cannot be calculated by a mathematical formula. You can enter an unlimited num-
ber of such commission types per loan or tranche.
Tip
You can record complex regular commissions as one-time payments; in this way, each
payment is considered to be an irregular commission.
INSTRU MENT OR TRANCHE L EVEL COMMISSIONS?

Regular commissions can be recorded and calculated at either the instrument (loan) or
tranche level. The calculation methods and the level to which they can apply are shown in the
table:
Code Calculation Method Level of application
10 Percentage on committed undisbursed debt paid on a Instrument

regular basis
20 Percentage on the loan amount paid on a regular basis Instrument
30 Percentage on the outstanding amount paid on a Tranche

regular basis
31 Fixed percentage on the outstanding amount Tranche
50 Fixed amount on a regular basis Instrument
70 Percentage on interest payment paid at the same time Tranche
80 Percentage on principal payment paid at the same Tranche

time
93 Percentage on total disbursement on a regular basis Tranche
95 Percentage on each disbursement paid at the same Tranche

time
If you wish to record a tranche-level commission, you must indicate a tranche number in the
Tranche field; DMFAS then calculates commission payments only for those tranches you indi-
cated.
COMMI SSI ON TYPES

For loans, DMFAS can manage the following types of commissions or fees:
Commission Description
Agent Bank’s Fee In a syndicated loan, this fee is paid to the bank which acted as
the agent bank of the syndicate, as a compensation for its
administrative work (interest distribution, etc.)
Commission on each The commission that is paid on each drawing.

drawing
Commission on the The commission that is paid on the sum of drawings.

sum of drawings
Commitment Fee This is the charge made by the lender to the borrower for holding
available the undisbursed balance of a loan commitment.
Typically it is a fixed rate charge calculated on the basis of the
undisbursed balance.
Creditor Guarantor See Insurance Premium.

Fee
Debt reorganization The commission charged in the context of a debt reorganization

(for example, London Club).
Debtor Guarantor Fee The fee charged by the guarantor for the risk of guaranteeing the
payment of a loan.
Front-end Fee In the context of euro markets, it is a one-time fee charged on the
borrower at the time of signature of the loan contract.
Insurance Premium The amount of money that a policyholder pays to an insurance

company for covering an export credit risk.
In DMFAS an insurance premium can be recorded as a
commission. However, the insurance premium doesn’t always
appear as such: it can take the form of an interest rate increase or
be included in the credit amount—in that case, it cannot be
recorded as a commission.
Interest Commission Commission paid by the borrower during the payment of

interest.
Legal Fees All legal expenses in relation with a credit operation.
Management Fee Fees charged for managing a syndicated loan operation or a debt
security operation. It aims at paying banks which participated in
a syndication and is usually a one-time commission payable at
the time of signature of the loan agreement.
It generally consists of several sub-fees: the praecipium paid to

the lead bank, the pool paid to the management group, the
participation fee divided between the banks according to their
participation in the financing operation and the underwriting
commission. It represents a percentage of the total amount of the
commitment and is generally paid to the agent bank on behalf of
the participating banks.
About Commissions
Other The “OTHER” code, which appears in several DMFAS lists of

values, can be used to record data not falling under any of the
ordinary categories. However, use of this code is not
recommended. If you feel that useful codes are lacking in the
standard lists of values, please inform the DMFAS Programme,
which will take your request into account for future releases of
the software.
Out of Pocket Payment for travel and daily subsistence allowance (DSA) of the
Expenses debtor’s advisers/lawyers, etc.
Prepayment Fee An amount charged for a loan redeemed before maturity and
similar to a penalty.
Principal Commission paid by the borrower at the time of reimbursement

Commission of principal.
Business day convention dialog box

In this dialog box, you can assign a business day convention to a regular commission sched-
ule at the loan or tranche level. You can also specify whether the commission amounts are to
be recalculated based on the modified dates.

Registering Revolving Credit
About
About this
this chapter
chapter
is revolvingtocredit?
DMFAS
What

Setting up revolving credit

An example of revolving credit
About revolving credit .........................................................................................................127
What is revolving credit? ................................................................................................................... 127

DMFAS and revolving credit ............................................................................................................... 127
Setting up a revolving facility for a loan ...............................................................................128
Recording the loan’s general information ........................................................................................... 128

Recording the conditions of the revolving facility ................................................................................ 129
Recording the tranche information ...................................................................................................... 129
Recording estimated drawings, principal, interest and commissions ..................................................... 129
Recording real drawings ..................................................................................................................... 129
Recording real payments .................................................................................................................... 129
An example of revolving credit ...........................................................................................131
Case 1 - Fully repaid at the end date ................................................................................................. 131

Case 2 - The outstanding is less than the ceiling at the end date ....................................................... 132
Case 3 - The outstanding is equal to the ceiling at the end date ......................................................... 132
About revolving credit
About revolving credit

WHAT IS REVOLVING CREDIT?
Revolving credit is a contractual agreement that provides the borrower with the right to draw
various times the repayments made before a specific availability date from accounts held
open for that purpose. Each new drawing constitutes a new disbursement. Each repayment of
principal constitutes a new commitment (whose terms are specified in the original agree-
ment).
Revolving credit in time is available for a specific amount every week, month or year until
expiry regardless of whether any amount was drawn in the preceding time period. Such
credit can be non-cumulative or cumulative; that is, unused portions can be carried forward
for use in the next period.
An example of revolving credit is presented at the end of this chapter.
The difference between a revolving general agreement and a revolving credit

For a revolving credit, the revolving conditions apply at the loan level whereas for a revolv-
ing general agreement, the revolving conditions relate to fund(s) specifically created to
finance one or more individual loans. For more information on revolving general agreements,
refer to Chapter 5 of this guide.
DMFAS AND REVOLVING CREDIT

You can quickly set up the conditions of a revolving credit in DMFAS.
Revolving credits are registered in the Loans module. All you have to do is specify the revolv-
ing period, the operation type (principal, interest or both), and a percentage for the operation.
DMFAS then keeps track of the undrawn balance of the revolving credit throughout all subse-
quent real drawings and debt service operations, as illustrated in the graphic below.
Setting up a revolving facility for a loan

Revolving credits are registered as loans with a revolving facility. This section explains how
to set up this revolving facility. In general, you apply the same procedures you would to any
ordinary loan throughout its life cycle: registration, mobilization of funds, debt service and
report production. In terms of DMFAS, the extra steps to implement are explained below.
RECORDING THE LOAN’S GENERAL INF O RM ATION

Begin by recording the loan’s general information. You do this as usual from the General
Information window of the Loans module. In the Agreement Info 2 tab, select “Revolving
Credit” for Type (Instrument Classification).
You then record the specific data for the revolving facility in a dialog box which you call by
clicking the Revolving Terms link.
Example of a revolving credit with an amount of 1,000,000 USD.
Loan amount
The amount of the loan corresponds to the ceiling of the revolving credit, that is, the
maximum amount available for a drawing at a given point in time. The total amount of
drawings, and therefore the final amount of the debt, can be known only at the end of the
revolving period.
RECOMMENDATION
It is recommended to record the revolving credit with tranche management option 1 (one
tranche) or 2 (unknown number of tranches) as DMFAS automatically updates the undis-
bursed amount of a revolving credit at the tranche level only for these two options.
Setting up a revolving facility for a loan
RECORDING THE CONDITIONS OF TH E REVOLVING FACILITY

There can be more than one revolving condition for a loan; for example, a revolving percent-
age of 100% for principal and 50% for interest in the same period. Each condition appears on
a separate row in the grid of the dialog box.
A revolving condition can differ from one period to another; for example, a revolving per-
centage 100% for principal for one period and 50% for another period.
According to the conditions of the revolving facility set in this example, an amount equal to 100 percent of the
reimbursement of principal can be borrowed again.
RECORDING THE TRANCHE INFORMATION

Record tranche information in the usual way.
RECORDING ESTIMATED DRAWIN GS, PRINCIPAL, INTE REST AND

COMMISSIONS
You should record estimated drawings, as well as the terms for principal, interest and com-
mission in the regular way.
RECORDING REAL DRAWINGS

Record real drawings as you would for any other loans. The Real Drawings window keeps
track of the undisbursed amount.
CAUTION
While the revolving facility is being used, you may need to change the drawing limit date in
the General Information window to be able to make new drawings.
RECORDING REAL PAYMENTS

Once real payments recorded during the revolving period (defined in the Revolving Terms
dialog box) generate an increase of the undisbursed amount. DMFAS calculates the undis-
bursed amount of the loan/tranche via the following equation:
Undisbursed Amount = Loan/Tranche Amount - SUM (Drawings) +

SUM (Revolving Payments)
Automatic update of undisbursed amount

When you record real payments, DMFAS updates the undisbursed amount in the following
ways:
If the tranche then DMFAS applies the above and you need to:
management option formula and updates the
selected is... undisbursed amount of...
one tranche (1) the loan (internally) Recalculate estimated
drawings and
tranche 1 (can be viewed in the amortization table of
Estimated Drawings tab) tranche 1
unknown number of the loan (internally) Recalculate estimated
tranches (2) drawings and
tranche 0 (can be viewed in the amortization table of
Estimated Drawings tab) tranche 0
known number of the loan (internally) Create a new tranche for
tranches (3) an amount equal to the
new funds available for
drawing
An example of revolving credit
An example of revolving credit

The following example illustrates three distinct uses of revolving credit based on the same
terms: an amount of 100,000.00 and a revolving period from 1.3.2002 to 31.12.2002. The three
cases are as follows:
• The amount is fully repaid at the end date.
• The outstanding is less than the ceiling at the end date.
• The outstanding is equal to the ceiling at the end date.
CASE 1 - FULLY REPAID AT THE END DATE
Cumulative Cumulative
Dates Drawings Repayments Undisbursed Outstanding
Drawings Repayments
3/1/02 30,000.00 30,000.00 0.00 70,000.00 30,000.00
29/3/02 15,000.00 45,000.00 0.00 55,000.00 45,000.00
1/4/02 45,000.00 22,000.00 22,000.00 77,000.00 23,000.00
30/4/02 45,000.00 23,000.00 45,000.00 100,000.00 0.00
15/6/02 58,000.00 103,000.00 45,000.00 42,000.00 58,000.00
25/6/02 40,000.00 143,000.00 45,000.00 2,000.00 98,000.00
15/7/02 143,000.00 55,000.00 100,000.00 57,000.00 43,000.00
31/10/02 143,000.00 15,000.00 115,000.00 72,000.00 28,000.00
31/12/02 143,000.00 38,000.00 143,000.00 100,000.00 0.00
TOTAL 143,000.00 143,000.00
15/1/03 0.00
15/7/03 0.00
15/1/04 0.00
15/7/04 0.00
15/1/05 0.00
CASE 2 - THE OUTSTANDING IS LESS THA N T H E C E I L I N G A T T H E E N D D A T E
Drawings Repayments
3/1/02 30,000.00 30,000.00 0.00 0.00 70,000.00 30,000.00
29/3/02 15,000.00 45,000.00 0.00 0.00 55,000.00 45,000.00
1/4/02 45,000.00 22,000.00 22,000.00 77,000.00 23,000.00
30/4/02 45,000.00 23,000.00 45,000.00 100,000.00 0.00
15/6/02 58,000.00 103,000.00 0.00 45,000.00 42,000.00 58,000.00
25/6/02 40,000.00 143,000.00 0.00 45,000.00 2,000.00 98,000.00
15/7/02 143,000.00 0.00 45,000.00 2,000.00 98,000.00
31/10/02 143,000.00 0.00 45,000.00 2,000.00 98,000.00
31/12/02 143,000.00 0.00 45,000.00 2,000.00 98,000.00
TOTAL 143,000.00 45,000.00
15/1/03 19,600.00
15/7/03 19,600.00
15/1/04 19,600.00
15/7/04 19,600.00
15/1/05 19,600.00
C A S E 3 - T H E O U T S T A N D I N G I S E QU A L TO TH E CE ILI NG AT TH E E ND D ATE
Drawings Repayments
3/1/02 30,000.00 30,000.00 0.00 0.00 70,000.00 30,000.00
29/3/02 15,000.00 45,000.00 0.00 0.00 55,000.00 45,000.00
1/4/02 45,000.00 22,000.00 22,000.00 77,000.00 23,000.00
30/4/02 45,000.00 23,000.00 45,000.00 100,000.00 0.00
15/6/02 58,000.00 103,000.00 0.00 45,000.00 42,000.00 58,000.00
25/6/02 40,000.00 143,000.00 0.00 45,000.00 2,000.00 98,000.00
15/7/02 2,000.00 145,000.00 0.00 45,000.00 0.00 100,000.00
31/10/02 145,000.00 0.00 45,000.00 0.00 100,000.00
31/12/02 145,000.00 0.00 45,000.00 0.00 100,000.00
TOTAL 145,000.00 45,000.00
15/1/03 20,000.00
15/7/03 20,000.00
15/1/04 20,000.00
15/7/04 20,000.00
15/1/05 20,000.00
Registering Local Government
Debt Instruments
About
About this
this chapter
chapter
An Introduction to DMFASdebt?
What is local government

Local government debt and fund facilities

About local government debt .............................................................................................135
What is meant by “local government”? .............................................................................................. 135

The background of local government debt ......................................................................................... 135
DMFAS and local government debt ..................................................................................................... 135
Recording local government debt related to a fund facility .................................................137
Creating a fund ................................................................................................................................. 137

Recording the general information and tranche/series information ...................................................... 138
Selecting the fund(s) and specifying the fund usage ............................................................................ 138
Recording debt service operations ...................................................................................................... 138
About local government debt
About local government debt

WHAT IS MEANT BY “ LOCAL GOVERNMENT”?
The term “local government” refers to a sub-national administration or authority. It can be a
government body at a second or third level such as a state, province, region or municipality.
In certain federal systems, these local governments exercise full autonomy in carrying out
functions such as debt management.
EXAMPLE
In Argentina, which is a federal republic, the 23 provinces and one autonomous city are
almost entirely responsible for managing public education, security, the legal system and
health care and have the capacity to borrow, within the limits of the provincial constitutions
and other restrictions set by the Federal Government.
Italy has 3 levels of local government, comprising 20 regions, 103 provinces and 8,100 munic-
ipalities. Prior to the early 1990s, the centralized system that was then in place ensured that
local governments in financial difficulty would receive support from the central government.
Following the reforms of the 1990s, which led to a transition toward fiscal decentralization,
this was no longer the case.
THE BACKGROUND OF LOCAL GOVERNMENT DEBT

Over the last two decades, there has been a growing tendency for decentralization, that is, the
process of transferring power from central governments to regions, provinces and cities,
including the power to borrow.
Many nations are adopting decentralized structures in response to a number of concerns of
national interest, or simply as central governments recognize that a decentralized structure
may lead to a more efficient and effective delivery of public services and greater local
accountability.
Also, governments have become reluctant to close the fiscal deficits generated at the sub-
national level. In some countries, the drive to greater accountability at the local level is influ-
enced by the central government’s need to comply with the fiscal conditions of their agree-
ments with the International Monetary Fund (IMF) or other multilateral lenders.
Approximately 70 countries in Latin America, Central Europe and other parts of the world
have initiated decentralizing policies, thus causing a significant increase in the participation
of local governments in the capital markets and public finance.
DMFAS AND L OCAL GOVERNMENT DEBT

DMFAS is able to meet the specific requirements of local government debt.
DMFAS facilitates the registration of loans or bonds with common characteristics granted to
or issued by local governments or other sub-national entities; it includes the daily calculation
of interest and daily payment of principal and interest.
Other changes are designed to create a relationship between these loans/debt securities and
funds to be used for debt service payments. These funds are made up of local government
revenue, such as taxes, royalties or other resources, either transferred from the central gov-
ernment or levied directly at the local level. These funds can be automatically allocated to the
reimbursement, and in some cases serve also as guarantees, of local government debt, as
illustrated below.
The method to record such a mechanism in DMFAS can be summarized as follows:

• Set up one or more funds to be used for debt service payments.
• Establish a link between these funds and the loans or debt securities so that funds are
allocated to their debt service.
• Record the funds’ usage, for example funds can serve as a guarantee (collateral) for
local government loans or debt securities.
The above items are examined in more detail in the remainder of this chapter.
Recording local government debt related to a fund facility
Recording local government debt related to a fund

facility
CREATING A FUND
Funds are money deposits in special accounts. With DMFAS, you can designate a source of
funds intended for full or partial debt service payments of a tranche or series. Such payments
can include commissions and arrears.
You set up the fund itself as a Funds reference file. For more information, refer to the “Funds”
section in Chapter 4 of this guide.
EXAMPLE
In Argentina, the funds are made up essentially of revenues, such as taxes, royalties and other
resources transferred from the central government. The list of funds used for the debt service
of local government debt could be the following:
• Cession of joint federal taxes
• Cession of mining royalties
• Cession of petroleum royalties
• Cession of hydrocarbon royalties
• Cession of hydraulic royalties
• Cession of province taxes
• Reserve fund
• Bonds
Once you’ve set up the necessary funds, you can define how they are to be used to make the
payments.
RECORDING THE GENERAL INFORMATION AND TRANCHE/SERIES

INFORMATION
After recording the general information for the loan or debt security, record the tranche/
series information in the usual way in the Loans or Debt Securities module.
Daily periodicity and conversion

DMFAS features make it possible to include the daily calculation of interest as well as the
daily payment of principal and interest for a tranche or series.
In the Principal tab, a field called Period in days corresponds to the number of days between
two principal payments.
A similar field, also called Period in days, appears in the Interest tab. It corresponds to the
number of days between two interest payments. In addition, the Conversion Factor field also
contains a daily code. The conversion factor is the number of times interest is calculated in the
chosen periodicity. Generally, the conversion factor and the periodicity are the same.
Fund usage
You then establish a link with one or more funds and record the specific data for the fund
usage in a dialog box which you call by clicking the Fund Details and Usage dialog box.
SELECTING THE FUND(S) AND SP ECIFYING THE FUND USAGE

This window enables you to:
• establish a link between funds previously created and a specific tranche/series
• record the fund’s usage: for example, funds can serve as a guarantee (collateral) for
local government debt, and the amount or percentage of the fund to be allocated to the
debt service of the tranche/series.
RECORDING DEBT SER VICE OPERATIONS

As you record debt service operations, DMFAS gives you the ability to view a fund’s amount
and change it if necessary. This applies to all payments of principal, interest, commission,
arrears or late interest.
In all the related windows, a link called Payment Funds enables you to obtain the fund infor-
mation.
You can select several funds and then enter the amounts manually. The sum of amounts
should be equal to the amount of the debt service operation.
PART 4
Registering Debt Securities
140
An Introduction to
Debt Securities
About
About this
this chapter
chapter
What are debt securities?

The participants in an issue

How securities are issued
The securities market
142 Part 4 Registering Debt Securities
About Debt Securities .........................................................................................................143
What are debt securities? .................................................................................................................. 143

How securities are represented .......................................................................................................... 143
The participants in an issue ............................................................................................................... 143
How securities are issued .................................................................................................................. 144
The securities market ........................................................................................................................ 145
External or domestic debt? ................................................................................................................. 145
Presentation of debt securities statistics .............................................................................................. 146
About Debt Securities

WHAT ARE DEBT SECURITIES?
A debt security is a negotiable financial instrument which provides its holder with the right
to an interest on the capital and/or to the repayment of the principal. Only securities that are
traded or tradable in organized or other financial markets can be qualified as negotiable secu-
rities. Bills, bonds, negotiable certificates of deposit and commercial paper are examples of
debt securities.
In DMFAS, debt securities are opposed to loans which are non-negotiable debt instruments.
Nevertheless, debt securities may also include loans that have become negotiable de facto,
provided they are traded on organized or other financial markets. Also, non-negotiable secu-
rities, such as government savings bonds, should be excluded from debt securities.
HOW SECURITIES ARE REPRESENTED

Debt securities may have the physical form of paper or be registered in the form of an elec-
tronic-book entry. Securities may be bearer or registered.
Bearer securities
A bearer security is a negotiable and usually unregistered security on which interest and prin-
cipal are payable to the holder. The owner of the security is the person who holds it. Bearer
securities are negotiable without endorsement and transferred by delivery.
Some types of bearer securities (including Eurobonds) are traded through systems that mini-
mize physical movements of the securities by depositing quantities of the bearer security
securely in banks. The registered ownership of the deposited securities can then be traded.
Registered securities
These are securities whereby ownership is recorded in a register kept by the issuer or its
agent. The security can be a paper certificate or be in a dematerialized form. Registration pro-
vides evidence of ownership, which can only be transferred through the amendment of the
entry on the register, now maintained as simple computer records.
A registered security can also refer to securities that cannot be sold or transferred due to
restrictions placed upon them at the time of issue.
THE PAR TICIPANTS IN AN ISSUE

There are generally three participants in the issue of a security:
• The issuer
• The intermediary
• The subscriber
The issuer is the Government, public body or entity issuing the security.
The intermediary may be a department of the Treasury, the Post Office or a commercial bank.
In a syndication, it can be the lead bank or lead manager which is given the mandate by a
potential borrower to arrange an issue. For a Eurobond, the lead manager is also responsible
for setting up the management group which may consist of several lead managers assisted by
co-lead managers. When a syndicate is composed of several lead banks, generally the bank
receiving the mandate is considered to be the principal lead bank.
The intermediary intervenes in the subscription phase and the debt service phase. During the
subscription phase, it collects funds from subscribers which it remits to the issuer at the end
of this phase. During the debt service phase, it pays out interest and capital from the funds it
receives from the issuer.
It should be noted that the intermediary is more a function than a participant. In fact, the
State can perform the dual function of issuer, which subsequently manages the debt, and
intermediary with respect to the subscribers. The two functions can be performed by different
government agencies such as the debt management office and Treasury.
The subscriber, also called the holder, is the creditor. The subscriber owns the security. Sub-
scribers can be individuals or institutions such as corporations, banks, insurance companies
and so on. As such, they are entitled to regular interest payments and to the return of the
principal upon maturity. Holders may subscribe to corporate, government or municipal
issues.
HOW SECU RITI ES ARE I SSU ED

There are two main systems for issuing bonds: auctions and syndication.
An auction (tender) consists of an invitation to bid to which the bidders reply. The aim is to
ensure free competition among the bidders. Investors may participate in auctions through
two types of bids:
• competitive bids where the investor indicates the desired nominal amount and the
price he or she is willing to pay, or
• non-competitive bids where the investor indicates only the desired nominal amount
and pays for the weighted average price in the auction
Syndication involves organizing a banking syndicate to arrange an issue. The potential bor-
rower gives a mandate to a bank (the lead manager) to set up a management group which
may consist of several lead managers assisted by co-lead managers.
The management group, headed and administered by the lead manager, may decide to set up
an underwriting group and a selling group. The issuer and the syndicate then sign an agree-
ment, which specifies the legal and financial characteristics of the issue, the subscription
mode and the remuneration of the members.
This agreement may be a firm commitment. In a firm commitment, all members of the syndi-
cate undertake, in proportion to their share in the contract, to pay the full amount of the issue
to the issuer at the end of the subscription period.
From the issuer’s point of view, tenders are more difficult to manage since they require the
organization of a bid selection process.
THE SECURITIES MARKET
Primary and secondary market

The securities market can be divided into primary and secondary markets.
The primary market is the market for new issues of securities, as distinguished from the sec-
ondary market, where previously issued securities are bought and sold. A market is primary
if the proceeds of sales go to the issuer of the securities sold. The term also applies to govern-
ment securities auctions.
The secondary market is the market where debt securities are traded after they have been ini-
tially offered in the primary market. It is also the market where existing loans of indebted
countries are traded. The effective price to be paid by the buyer is typically lower than the
face value of the loan, reflecting the risk of non-payment by the borrower country.
Public offer and private placement

In primary markets, securities may be offered to the public in a public offer. Alternatively,
they may be offered privately to a limited number of qualified persons in a private placement.
Often a combination of the two is used. The distinction between the two is important to secu-
rities regulation and company law. Privately placed securities are often not publicly tradable
and may only be bought and sold by qualified investors. As a result, the secondary market is
not as liquid. Sovereign debt is generally sold by auction to a specialized class of dealer.
Listing and OTC trading

Securities are often listed in a stock exchange, an organized and officially recognized market
on which securities can be bought and sold. Issuers may seek listings for their securities in
order to attract investors, by ensuring that there is a liquid and regulated market in which
investors will be able to buy and sell securities.
Growth in informal electronic trading systems has challenged the traditional business of
stock exchanges. Large volumes of securities are also bought and sold “over the counter”
(OTC). OTC dealing involves buyers and sellers doing business over the telephone or elec-
tronically on the basis of prices published electronically by commercial financial vendors
such as Reuters and Bloomberg. Many smaller issues are traded in OTC markets.
EX TE RNAL OR DOMES TI C DEB T?

Debt securities issues can relate to both external and domestic debt. For example, Eurobonds
are intended for the international financial market while national issues are meant for the
domestic market. Moreover, global issues are often launched simultaneously in both domes-
tic and international markets, and there is often a lack of information on the proportion
issued in each market. Knowing if the final holder of a debt security is a resident or non-resi-
dent is not always easy. Therefore, although the classification of a debt security as external or
domestic debt should depend on the residence of the owner of the security, other elements
such as the location and currency of the issue as well as the law governing the issuance may
be taken into account.
PRESENTATI ON OF DEBT SECURITIES S TA T I ST IC S

The Handbook on Securities Statistics, produced by the Bank for International Settlements (BIS),
the European Central Bank (ECB) and the International Monetary Fund (IMF) in May 2009
provides a conceptual framework for statistics on debt securities issues. It recommends a styl-
ized presentation table with aggregate statistics on debt securities issues which are classified
in accordance with five criteria: the issuer, the currency, the maturity, the interest rate and the
market.
The classification of debt securities issues according to the markets where they are issued
(domestic or international, or both) is based on the following rule:
“Debt securities issued by a resident of the same economy in which the security is issued are
to be classified as domestically issued, regardless of the currency of issue. All other issues are
to be classified as internationally issued.” (Guidelines from the IMF’s External Debt Statistics:
Guide for Compilers and Users, paragraph 6.21).
If there is uncertainty as to the market of an issue, then the following criteria should be used,
in descending order of preference, to determine whether the resident of an economy has
issued a domestic or an international debt security:
Domestic debt security International debt security
The debt security is listed on a recognized The debt security is listed on a recognized
exchange in the domestic economy. exchange in a foreign economy.
The debt security has an International The debt security has an ISIN code with a
Security Identification Number (ISIN) country code different from that where the
with a country code the same as the legal issuer is legally domiciled and/or has a
domicile of the issuer, and/or is allocated foreign security code issued by a foreign
a domestic security code by the domestic national numbering agency.
national numbering agency.
The security is issued in a domestic The security is issued in a foreign currency.

currency.
Registering Debt Securities
About
About this
this chapter
chapter
An Introduction to DMFASmodule
About the Debt Securities

The categories of instruments in the module

How the windows are organized
General Information
Series
Commissions
About the Debt Securities module .......................................................................................149
The categories of instruments in the module ....................................................................................... 149

The coverage of bonds and notes ....................................................................................................... 150
How the windows are organized in DMFAS ......................................................................................... 151
The General Information window .......................................................................................153
The Characteristics tab ...................................................................................................................... 153

The User Info tab .............................................................................................................................. 155
The Notes tab ................................................................................................................................... 155
The Series window ..............................................................................................................156
The Series Info tab ............................................................................................................................ 156

The Participants tab ............................................................................................................................ 157
The Subscription tab .......................................................................................................................... 158
The User Info tab ............................................................................................................................... 159
The Interest tab ................................................................................................................................. 162
The Amortization Table tab ................................................................................................................ 165
The Pricing tab ................................................................................................................................. 166
The Commissions window ...................................................................................................167
The Terms tab .................................................................................................................................... 167

Regular and irregular commissions ..................................................................................................... 168
Instrument or series level commissions? ............................................................................................. 168
Commission types .............................................................................................................................. 169
The Payment Schedule tab ................................................................................................................. 170

About the Debt Securities module

This DMFAS module is used to register all types of debt securities from short-term to long-
term.
THE CATEGORIES OF INSTRUMENTS IN THE MODU LE

The module is divided into four categories of instruments:
• Money Market Instruments are a classification of financial instruments which
includes short-term debt securities that generally give the owner the unconditional
right to receive a stated, fixed sum of money on a specified date. These instruments
usually are traded, at a discount, in organized markets; the discount is dependent
upon the interest rate and the time remaining to maturity. Included in this category are
such instruments as treasury bills, commercial and financial paper, banker’s acceptan-
ces, negotiable certificates of deposit (with original maturities of one year or less), and
short-term notes issued under note issuance facilities.
In DMFAS, you can record money market instruments issued at a discount as well as
those that are interest bearing.
• Bonds and Notes are a classification of financial instruments which includes debt secu-
rities with an original maturity of over one year. They are usually traded (or tradable)
in organized markets or over-the-counter (OTC) markets. Bonds and notes usually
give the holder the unconditional right to fixed money income or contractually deter-
mined variable money income. With the exception of perpetual bonds, bonds and
notes also provide the holder with an unconditional right to a fixed sum of repayment
of principal on a specified date or dates.
• Promissory Notes constitute a written promise to pay a specified sum of money to an
individual or bearer on a certain date. Widely used in international trade, they are
issued by an importer in favor of the exporter. When the latter endorses the note, pro-
vided the importer is creditworthy, a promissory note is traded.
In DMFAS, you can record promissory notes issued at a discount as well as those that
are interest bearing.
• Other Securities are debt securities not covered by the other categories and which may
be specific to a given country. This category can be customized to suit the needs of your
institution.
The above categories are further organized as shown in the illustration below:
In addition, the module incorporates an instrument approach meaning that all the windows
and fields are specifically adapted for each type of debt security.
THE COVERAGE OF BONDS AND NOTES

DMFAS can handle the following types of bonds and notes:
• zero-coupon bonds
• fixed rate bonds
• floating rate securities
• stepped bonds
• annuities
• perpetual bonds
• others
Zero-coupon bonds
Zero coupon bonds, also called accrual bonds, do not make periodic interest payments.
Instead, these types of bonds are issued at a deep discount and pay the full face value at
maturity. The difference between the discounted issue price and the face or redemption value
reflects the market rate of interest at the time of issue and time to maturity. The longer the
maturity of the bond and the higher the interest rate, the greater the discount against the face
or redemption value.
A zero coupon bond can be issued at a discount, or it may be stripped out of its coupons by a
financial institution and then repackaged as a zero-coupon bond.
Fixed rate bonds

A fixed rate bond is a security where the issuer is obliged to pay a fixed rate which does not
fluctuate with general market conditions. By applying a fixed rate, the issuer can calculate the
exact amount of money to be paid on the interest payment dates and the redemption date.
Floating rate securities

These instruments are a security whose interest payments are linked to a reference index (for
example, LIBOR), or the price of a specific commodity, or the price of a specific financial
instrument that normally changes over time in a continuous manner in response to market
pressures. Usually floating rate securities carry a fixed spread over a referral index. The inter-
est of this type of security can, however, be set to be a fixed percentage above, below or equal
to the benchmark itself. Floating rate bonds should be classified as long-term debt securities,
unless they have an original maturity of one year or less, in which case they should be classi-
fied as money market instruments.
Stepped bonds
Stepped bonds are also called stepped coupon bonds or step-up bonds.
A stepped bond is a bond with different interest rates for different periods, fixed in advance
of the issue. For example, a five-year bond may pay a 5% interest for the first two years of its
life, then step up to 7% interest for the final three years. A stepped bond might also pay 9%
interest for the first 5 years after issue and then step up the interest every fifth year until
maturity. Issuers often have the right to call the bond at par on the date the interest rate is
scheduled to change.
Annuities
An annuity is an instrument with a set of periodical payments at equal intervals of time and
usually equal in amount. An anuity has the particularity that the sum of principal repayments
plus interest payments is constant though the whole amortization period. Over the life of the
instrument, individual payments contain increasing amounts of principal and, correspond-
ingly, declining amounts of interest.
Although the term “annuity” means annual payments, the meaning has been extended to
apply to payments at any regular intervals. Payments, which represent the rent of the annu-
ity, can be made at the beginning or at the end of the payment intervals (i.e. the duration of
time between consecutive payments). The latter case is called an ordinary annuity whereby
the first payment is made at the end of the first period and the last payment is made at the
end of the last period. A so-called “annuity certain” is an annuity for which payments begin
and end at fixed dates.
In DMFAS, annuities should be recorded as loans if they are non-negotiable debt instruments,
or as debt securities if they are negotiable debt instruments.
Perpetual bonds
This is a bond that has no maturity date. As it has no scheduled repayment of principal, it
pays interest indefinitely. Another characteristic is that it cannot be redeemed by the issuer.
An example of perpetual bonds is the British consol.
HOW THE WINDOWS ARE OR GANIZED IN DMFAS

Depending on the debt security you are working with, the structure of the DMFAS window
you use to record data can be either simple or complex.
A simple structure consists of one window made up of the following tabs:
Characteristics, Participants, User Info, User Info 5.3, Subscription, Interest (for interest-bearing
instruments), Amortization Table, Budget Lines, Pricing, Notes, Attachments
A complex structure is used for debt securities which may have series; it involves a set of
three windows made up of a number of tabs:
Window Tabs
General Information Characteristics, Participants, User Info, Notes, Attachments
Series Series Info, Participants, Subscription, User Info, Principal,

Interest, Amortization Table, Pricing
Commissions Terms, Payment Schedule
In DMFAS the concept of “series” is similar to the one of tranches: it is an autonomous entity
with its own principal repayment schedule, its own currency and its own interest terms. More
precisely, a series is a group of certificates of indebtedness belonging to the same debt security
and sharing the same attributes and repayment conditions. In addition, it may have its own
participants. In DMFAS, series can be recorded for bonds and promissory notes that bear
interest.
For DMFAS 5.3 users

You no longer need to specify an option for managing the number of series.
For internal purposes, DMFAS manages debt securities with a simple structure as if they had
one series.
For debt securities with a complex structure (i.e. with one or more series), DMFAS automati-
cally sets the series option to “known number of tranches”.
In addition, you now have the option of creating real subscriptions directly from the Debt
Securities module, in addition to the module in the Mobilization menu.
The following is a list of the debt securities in terms of their structure:
Debt Security Structure
Discount money market instruments Simple
Interest-bearing money market instruments Simple
Other money market instruments Complex
Zero Coupon Simple
Fixed Coupon Complex
Floating Rate Securities Complex
Stepped Bonds Complex
Annuities Complex
Perpetual Complex
Other (bonds and notes) Complex
Discount promissory notes Simple
Interest-bearing promissory notes Complex
Other securities Complex
NOTE
Descriptions of the windows and tabs in the rest of the chapter are presented according to the
complex structure.

THE CHARACTERISTICS TAB
The Characteristics tab is the starting point for recording data about the security. It lets you
record general and specific information about the instrument including identification, issu-
ance dates, issuance amounts and classification.
You record each instrument as a new security. This is also the case when a new security is
issued under the same programme since it would involve a different structure or maturity.
Nevertheless, you do not record a new instrument for a reopening, which is instead recorded
directly within the existing instrument.
The Characteristics tab provides access to these dialog boxes: Status History, Amendment
History and Reopening.
For information on purpose and purpose details, instrument classification and economic sec-
tor fields, refer to the related sections in Chapter 7, “Registering Loans Agreements”.

The Status History dialog box is used to consult all the status changes to the security through-
out its life cycle. When you modify the status, a dialog box called Modifications appears
prompting you to indicate whether the change is a correction or an amendment.

The Amendment History dialog box is used to consult all the various amendments to the
security which may relate to a change in the amount or issuance date. When you modify one
of these fields, a dialog box called Modifications appears prompting you to indicate whether
the change is a correction, an amendment or a reopening.
The Reopening dialog box

The Reopening dialog box lets you record a reopening, which is the issuance of an additional
amount of a previously issued debt security. The reopened security has the same maturity
date and interest rate as the original security; however, compared to the original security, the
reopened security has a different issue date and usually a different purchase price. In the dia-
log box, you enter a reopening date and a reopening amount.

The Participants tab is used to record the main participants in the issue: the subscriber and
issuer. Based on your choice of participants, DMFAS automatically displays the related classi-
fication information. In this tab, you can also record the other participants in the issue.
THE US ER I NFO TAB

THE NOTES TAB

The tab provides you with a space in which you can enter any notes, comments or observa-
tions you wish to record regarding the debt security. Feel free to enter as much detailed infor-
mation as you like.
THE ATTACHMENTS TAB

In this tab, you can insert a file or document to be stored with the debt security. This means
that when you retrieve the instrument, you will have access to this file or document. For
example, you can attach any of the following:
• a Word document
• an Excel spreadsheet
• a PDF file
• a simple text file
The Series window

THE SERI ES INF O TAB
The Series Info tab displays data already recorded in the Characteristics tab. It also lets you
enter basic information about a specific series such as its face value, currency and the eco-
nomic sector to which it is related.
The Reference for DSM+ dialog box

The fields in this dialog box relate to the facility in DMFAS for exporting data to DSM+ (Debt
Sustainability Model Plus). It is no longer supported by the DMFAS Programme.
The Indexation Conditions dialog box

This dialog box lets you link an index type to a security. Examples of index types that DMFAS
can handle include:
• Consumer Prices Index (CPI)
• Commodities Prices Index
• Wholesale Prices Index
• Service Price Index
• Retail Prices Index
• Rate of Growth of GDP
• Variation of Wages Index
• Cost of Construction Index
There are many others too. The index type is used to adjust interest and/or principal accord-
ing to the selected index type.
The Series window
The Business Day Convention dialog box

day that is not business day; for example, a holiday. Such a payment date may be associated
In this dialog box, you can assign a business day convention to both the principal and interest
payment dates associated with the series. For interest payment dates, you can also specify
whether the interest amounts are to be recalculated based on the modified dates.

The Participants tab is used to record the participants in the series other than the subscriber
and issuer. In the case of a syndicated security, you would enter the name of the participants
in the syndicate, including the creditors. In addition to the name of the participants, you also
enter the participation type (for example, guarantor, trustee or underwriter) as well as the
amount or percentage of the participation in the series.
THE SUBSCRIPTION TAB

The Subscription tab provides a method for recording subscriptions for the debt security. A
subscription is an agreement to buy newly issued debt securities. In DMFAS, a subscription is
the payment done to the issuer of a debt security by the subscriber in the form of funds,
goods or services.
For the grid in the Accepted Bids group box, you can choose either to receive exported values
from the Auctions module directly or to enter them manually, one subscriber (bidder) at a
time. In this case, you need to enter bids in a specific order: first the competitive bids and then
the non-competitive bids.

See the explanation on the Interest tab in the next section of this chapter.
The Discount/Premium Terms dialog box

The dialog box provides three options relating to when the discount/premium terms of the
security are to be applied: at settlement date, at maturity date or accrued on a periodical basis.
The Real Subscriptions dialog box

The amount fields in the dialog box are totals calculated by DMFAS if the data for bids/sub-
scriptions was recorded in the Subscription tab. Otherwise, you need to fill in the fields man-
ually.
When you save the information in the dialog box, DMFAS updates the amortization table and
automatically creates the real subscriptions. You can retrieve them in the Debt Security
Subscriptions window (Mobilization) using the Search function.
The Series window
THE US ER I NFO TAB

Fields from DMFAS 5.3 conversion

These fields relate to DMFAS 5.3 classification, that is, Agreement Type, Financing Type and
Credit Terms. Such fields were either replaced or renamed in DMFAS 6. For instruments with
a simple structure, these fields appear in the User Info 5.3 tab.
THE PRINCIPAL TAB

The Principal tab is used to record and update data relating to the principal terms of a series
such as the principal repayment schedule, an algorithm which defines how individual princi-
pal payments will be distributed over a given period of time.
When and how debt securities are repaid

For medium- and long-term issues, practices relating to repayments may vary: redemption in
fine, equal-principal amortization or even constant-payment annuities.
Some securities, in particular medium- and long-term bonds, offer more flexibility to inves-
tors and issuers with provisions allowing for redemption before the schedule maturity:
• A callable or redeemable bond gives the bond issuer the right but not the obligation to
redeem bonds before the maturity date, under certain conditions. The issuer, however,
must pay the bondholders a premium. Some bonds can be called by the issuer any time
after the call protection period, other bonds can be called by the issuer only on pre-
specified dates. Usually a company will call a bond if it is paying a higher coupon than
the current market rates. In such a case, the company can reissue the same bonds at a
lower interest rate.
• Puttable bonds give bondholders the right but not the obligation to sell their bond back
to the issuer at a predetermined price and date.
In case of early redemption, penalty interest may apply.
Bonds can also be bought back by reverse tender, where the subscriber proposes a buy-back
price to the issuer. A buy-back may be total or partial. As a result, the outstanding debt is
either reduced or canceled even though the amount repaid is not equal to the nominal value
or the nominal plus the redemption premium.
The principal repayment schedule

A series may have several periods for principal repayment usually combining a regular with
an irregular schedule.
Regular schedules
A regular schedule contains several payments of equal amounts spread out at regular inter-
vals over the principal repayment period. More than one regular schedule can occur within
the same series but only if calculation method 10 (equal principal repayments) is used.
Irregular schedules
An irregular schedule has only one repayment date and one amount. There can be several
irregular schedules within the same series. In other words, each irregular schedule corre-
sponds to one irregular payment.
Calculation methods in DMFAS

Calculation methods relating to principal in DMFAS are listed in the table.
Code Calculation Method
10 Equal principal payments
12 Interest based on denomination
22 Annuity paid beginning of period
21 Annuity paid end of period
70 Equal principal payments on new outstanding

The Series window

the start and end dates of a principal repayment schedule.

THE INTERE ST TAB

The Interest tab is used to record or update the interest terms of a series such as interest rates,
interest payment schedules and budget lines.
Interest or coupon?
A coupon is the nominal interest rate on a security that the issuer promises to pay to the
holder until maturity. A coupon is usually paid on a regular basis and expressed as an annual
percentage of the face value.
The term derives from the small detachable segment of a bond certificate which, when pre-
sented to the bond’s issuer, entitles the holder to the interest due on that date. Replaced by
registered bonds and book-entry securities, bonds with detachable coupons are disappearing.
Coupons can be fixed, floating (also called adjustable) or index-linked. There are also zero
coupon bonds.
For fixed rate bonds

For fixed rate bonds, the rate is a fixed percentage of the value and does not fluctuate with
general market conditions. By applying a fixed rate, the issuer can calculate the exact amount
of money to be paid on the interest payment dates and the redemption date.
For floating rate bonds

A floating rate bond is a long-term bond for which the interest rate is adjusted periodically
according to a predetermined formula based upon specific market indicators. The rate varies
according to the movement of the underlying benchmark. These types of coupons can, how-
ever, be set to be a fixed percentage above, below or equal to the benchmark itself.
Floaters are bonds whose interest rate varies with the interest rate of another debt instrument,
for example, a bond that has the interest rate of Treasury bill +2.5%. An inverse floater is a
bond whose coupon rate changes in inverse of short-term interest rates: as interest rates rise,
the coupon rate falls. An inverse floater subtracts the benchmark from a set coupon rate, for
example 6% minus LIBOR.
For indexed bonds

Indexed bonds can have both fixed and floating rates. They can be medium- to long-term
instruments where the issuer seeks to protect the investor by linking or indexing the instru-
ment to a foreign currency, a consumer index or the inflation rate.
For zero-coupon bonds

Zero-coupon bonds, also called accrual bonds, do not make periodic interest payments.
Instead, these types of bonds are issued at a deep discount and pay the full face value at
maturity. A zero-coupon bond can be issued at a discount, or it may be stripped of its cou-
pons by a financial institution and then repackaged as a zero-coupon bond.
The Series window
Variable interest rates

A variable interest rate is computed by adding a spread to a predetermined base rate, which
is a recognized and published interest rate; for example, 1.25% over LIBOR.
The spread of a variable rate is also recorded in the Interest tab of a given series. For the float-
ing rate to be used as a base rate, DMFAS gives you the possibility to record:
• Floating rate values that will apply to all securities/series associated with that rate
• Different values of this same rate for a given series
Recording floating rates with values common to all debt securities/series

A window, not part of this module, facilitates the entry of floating interest rates with values
“common” to all debt securities. Instead of recording this data repeatedly on a series by series
basis, it is recommended to use the Common Interest Rates reference file to define the values
of each floating rate.
By default, DMFAS applies these values to all the debt securities/series associated with the
same interest rate.
Recording floating rate values specific to series

You can also specifically record a different floating rate value for a given series via the Float-
ing Rate Values dialog box (accessible from the Rate Values link); in this case DMFAS uses
this value instead of the one recorded in the Common Interest Rates reference file.
Interest payment schedule

For any series, there can be several interest periods (or schedules).
Regular and irregular schedules

A regular schedule contains several interest payment dates spread out evenly throughout the
duration of the period. The amount of each payment can be calculated by a mathematical for-
mula.
An irregular schedule has only one interest payment date and one amount.
For annuities, you do not need to indicate an interest payment schedule.
Multiple regular schedules

A series may have several regular schedules. When this happens, the fields in the Rates
Application group are filled in as many times as there are different regular interest periods;
arrow keys let you view the data for the different interest periods.

the start and end dates of an interest payment schedule.
The Special Conditions dialog box

The Special Conditions dialog box is a facility that serves two purposes. On the one hand, it
lets you defer interest payments. It is also intended for the set-up of capitalized interest which
is explained separately in Chapter 21 of this guide.

The Amendment History dialog box is used to consult the amendments to a series resulting
from a change or deletion in financial conditions relating to principal, interest, commission or
subscription. When you modify certain fields in the:
• Subscription tab
• Principal tab
• Interest tab:
- the Rates Application group box
- the Payment Schedule group box
- the Special Conditions dialog box
- the Partial Capitalization dialog box
- the Other Penalty Rates dialog box
• Commissions tab
... DMFAS prompts you to indicate whether the change is a correction or an amendment. If
you select amendment, click the Reason button, enter a brief explanation for the amendement
and click Save.
To view the amendment recorded, click the Amendment History link where you made the
change or deletion. A read-only dialog box then appears showing the details of the amend-
ment. In order for this function to work, a parameter called Enable Financial Amendments must
be activated in the Control Panel.
The Series window
THE AMOR TIZATION TABLE TAB
What is an amortization table?

An amortization table refers to the schedule for the repayment of principal and payment of
interest to pay off a debt instrument by maturity. In DMFAS, the amortization table lists not
only scheduled principal repayments and interest payments but also discount/premium and
capitalized interest, if any.
The amortization table also lets you view real operations, based on real subscriptions and
debt service operations in the Mobilization and Debt Service modules. Real operations are
indicated by an asterisk (*).
The tab allows you to:
• consult the amortization table
• (re)calculate the amortization table
• refine or round off scheduled principal and interest amounts in the amortization table.
RECOMMENDATION
Because a new calculation may take time, it is best to use the Calculate button only after
you’ve recorded all important changes—excluding rounding corrections—during your
session. If you make rounding adjustments and then recalculate the table, you may then lose
them!
Once you have regenerated the table by pressing the Calculate button, DMFAS displays a
message informing you whether the calculations were successful. If any errors occurred, you
can view them in a report.
THE PRICING TAB

The Pricing tab shows data relating to the pricing and valuation of the security including
market price, current yield, clean price, dirty price and fair value. The market price and
accrued interest you record allow DMFAS to automatically calculate current yield, adjusted
current yield as well as the clean or dirty price. You must record fair value manually.
The Commissions window

The Commissions window is used to record or update data relating to the commission terms
of a debt security. These include a budget line(s) as well as regular and irregular commissions.
You can record this data at either the instrument level or the series level.
The Commissions window is made up of two tabs: Terms and Payment Schedule.
NOTE
For debt securities recorded with a simple structure, you record commissions directly in the
Subscription tab of the instrument.
THE TERMS TAB

The Terms tab enables you to record or update the terms of the commissions or fees to be
associated with the instrument in general or with a specific series.
The Business Day Convention dialog box

In this dialog box, you can assign a business day convention to a regular commission sched-
ule at the debt security or series level. You can also specify whether the commission amounts
are to be recalculated based on the modified dates.

REGULAR AND IRRE GULAR COMMISSIONS

The tab is divided into two parts: the upper part is for regular commissions, the lower part is
for irregular commissions.
Regular commissions
Regular commissions are commissions in which the intervals between payments are identi-
cal; their amounts can be calculated by a mathematical formula.
In general, you enter a specific type of regular commission only once per series or instrument.
However, it is common to find several types of regular commissions by instrument or series.
Irregular commissions
An irregular commission is any commission in which payments are made at uneven intervals
and which cannot be calculated by a mathematical formula. You can enter an unlimited num-
ber of such commission types per instrument or series.
Tip
You can record complex regular commissions as irregular payments; in this way, each
payment is considered to be an irregular commission.
INS T RUME NT OR SE RI ES LE VEL COMM ISS IONS?

Regular commissions can be recorded and calculated at either the instrument (debt security)
or series level. The calculation methods and the level to which they can apply are shown in
the table.
Code Calculation Method Level of application
20 Percentage on the debt security amount paid on a regular Instrument

basis
30 Percentage on the oustanding amount paid on a regular basis Series
31 Fixed percentage on the outstanding amount Series
50 Percentage on the fixed amount paid on a regular basis Instrument
70 Percentage on the interest payment paid at the same time Series
80 Percentage on the principal payment paid at the same time Series
93 Percentage on total disbursements on a regular basis Series
95 Percentage on each disbursement paid at the same time Series
If you wish to record a series-level commission, you must indicate a series number in the
Series field; DMFAS then calculates commission payments only for those series you indi-
cated.
COMMI SSI ON TYPES
For debt securities, DMFAS can manage the following types of commissions or fees:
Agent Bank’s Fee The fees associated with the issuance of a debt security that are paid
to the bank which acted as the agent bank, as a compensation for its
administrative work (interest distribution, etc.)
Brokerage The commission paid to a broker for his or her services. It is usually
expressed as a percentage of the amount involved.
Debtor Guarantor The fee charged by the guarantor (for example, the Government)
Fee for the risk of guaranteeing the payment of a security (for example,
municipal bonds).
Discount/Premium Disregard this code which was used previously for conversion
(Debt Securities) purposes.
Insurance Premium The amount of money which a policyholder pays to an insurance

company for covering a risk.
In DMFAS an insurance premium can be recorded as a commission.

However, the insurance premium does not always appear as such:
it can take the form of an interest rate increase or be included in the
credit amount—in that case, it cannot be registered as a
commission.
Legal Fees All legal expenses relating to a debt security operation.
Management Fee A fee charged for managing a syndicated issue operation. It aims at
paying banks which participated in a syndication and is usually a
one-time commission payable at the time of signature of the
agreement.
It generally consists of several sub-fees: the praecipium paid to the

lead bank, the pool paid to the management group, the
participation fee divided between the banks according to their
participation in the financing operation and the underwriting
commission. It represents a percentage of the total amount of the
commitment and is generally paid to the agent bank on behalf of
the participating banks.
Other The “OTHER” code, which appears in several DMFAS lists of

values, can be used to record data not falling under any of the
ordinary categories. However, use of this code is not recommended.
If you feel that useful codes are lacking in the standard lists of
values, please inform the DMFAS Programme, which will take your
request into account for future releases of the software.
Out of Pocket Payment for travel and daily subsistence allowance (DSA) of the
Expenses debtor’s advisers/lawyers, etc.
Participation In the context of Eurobonds, it is the fee payable by the security

Underwriting issuer to the syndicate of lending agencies and/or financial
institutions as a compensation for the placement of its bonds.
Prepayment Fee An amount charged for a debt security redeemed before maturity
and similar to a penalty.
Risk Premium country-specific.

THE PAYMENT SCHEDULE TAB

The Payment Schedule tab lets you consult all the commissions recorded, by date and
amount, at both the instrument and series level.
PART 5
Registering Islamic Securities
172
Registering Sukuk
About
About this
this chapter
chapter
About sukuk

About the Sukuk module

174 Part 5 Registering Islamic Securities
About Sukuk .......................................................................................................................175
What are sukuk? ............................................................................................................................... 175

Salam sukuk ..................................................................................................................................... 175
Istisna’a sukuk .................................................................................................................................. 176
Ijara sukuk ........................................................................................................................................ 176
Mudabarah sukuk ............................................................................................................................. 176
Musharakah sukuk ............................................................................................................................ 177
Murabaha sukuk ............................................................................................................................... 177
Hybrid sukuk ..................................................................................................................................... 177
About the Sukuk module .....................................................................................................178

About Sukuk
About Sukuk
WHAT ARE SUKUK?
Sukuk (plural of sakk) are investment certificates that comply with Islamic rules and princi-
ples (Shari’ah). They are frequenty referred to as Islamic securities or Islamic bonds. In its
Shari’ah standard on investment sukuk, the Accounting and Auditing Organization for
Islamic Financial Institutions (AAOIFI) officially defines sukuk as certificates of equal value
representing undivided shares in ownership of tangible assets, usufruct and services or in the
ownership of the assets of particular projects or special investment activity.
However, this is true after the receipt of the value of the sukuk, the closing of the subscription
and employment of funds received for the purpose for which the sukuk was issued.
As Islamic financial instruments, sukuk do not pay interest, but generate returns from a non-
financial asset (the underlying asset): a variable rate of return tied to the performance of the
asset or returns that are not specified before the investment is made but shared on the basis of
a pre-agreed ratio of actual earnings. They are issued by private and public sector entities in
both Muslim and non-Muslim countries.
Sukuk are a form of securitization of other financial instruments and may take different
forms, depending on the structure of the master contract on which they are based:
• salam sukuk
• istisna’a sukuk
• ijara sukuk
• mudarabah sukuk
• musharakah sukuk
• murabaha sukuk
• hybrid sukuk, etc.
Depending on the nature and structure of the contract, not all sukuk are negotiable. Accord-
ing to international statistical standards, special categories can be included for statistics on
Islamic financial instruments. For example, for statistics on debt securities, sukuk that have
the characteristics of negotiable securities and are not investment in the permanent capital of
the issuer could be identified separately.
NOTE
In this guide, the term “Islamic instrument” rather than “sakk” is used as the singular form of
sukuk. In DMFAS 6, you can record the following types of sukuk described hereafter.
SALAM SUKUK
This is an instrument based on a salam contract. A salam contract is a particular form of sale
whereby the price is immediately payable and the delivery of the commodity is deferred. The
objective of the contract is to provide immediate cash to the seller to finance his activity and
to provide the buyer with the commodity at a relatively low price.
Salam sukuk represent a fractional ownership in the capital of a salam transaction. In order to
finance the advance payment, the seller will issue sukuk entitling ownership of the commod-
ity, which is well defined in its quality and quantity. At the maturity of the sukuk (which is
the same as the maturity of the salam transaction), the holders of sukuk will be entitled to the
commodity, which then can be sold at a higher price. The difference between the sale price
and the purchase price represents the return of the sukuk. Salam is possible only for fungible
goods, such as wheat, rice, oil, electricity, etc.
It is not permissible to sell or trade salam sukuk before their maturity as the underlying asset
(a debt on the seller) will only be converted into a tangible asset, and thus delivered, at the
maturity of the contract.
ISTISNA’A SUKUK
This instrument is based on an istisna’a contract. Istisna’a is a particular form of sale whereby
the purchaser places an order to a manufacturer to manufacture a specific commodity for a
determined price. In practice, the client enters into an istisna’a contract with an Islamic bank
to buy a manufactured commodity, and the bank will enter into a parallel istisna’a contract
with a manufacturer.
Istisna’a sukuk represent a fractional share in an istisna’a project financing. The project con-
sists in manufacturing or constructing an asset for a customer at a price to be paid in future
installments. The total amount of these installments equals the total face value of the sukuk,
in addition to a profit margin.
To issue the sukuk, the customer provides the Islamic bank with the details of the project; the
bank prepares a tender document and invites contractors (who will effectively build the
project) to submit bids in which they have to specify the timing of delivery of the project parts
and the payment schedule. Since the bank is expecting a stream of payments from the project,
certificates can be issued on the basis of the income expected from the project.
Sharia'ah prohibits the sale of these debt certificates to a third party at any price other than
their face value. Clearly such certificates cannot be traded in the secondary market.
IJ ARA SUKUK
This is an instrument based on an ijara contract. Ijara means literally to rent. Under the ijara
contract, an asset or a property is leased by the owner to another person for a rental payment.
Typically, this will be considered a finance lease. Since the lease will generate a fixed stream of
income, securities (sukuk) can be issued.
Ijara sukuk represent a proportionate ownership of an existing and well defined asset that is
tied up to a lease contract. These sukuk give their owners the right to own the asset, receive
the rent and dispose of their sukuk in a manner that does not affect the right of the lessee.
Ijara sukuk are therefore completely negotiable and can be traded in the secondary markets.
The holders of such sukuk bear all cost of maintenance of and damage to the asset. There may
be multiple forms of ijara sukuk depending on the nature of the asset and the method and
procedure of issuance of the certificates. Also, the expected return on some forms of ijara
sukuk may not be completely fixed and determined in advance. The payment of ijara rentals
can be made before the beginning of the lease period, during the period or after the period as
the parties may mutually decide.
MUDAB ARAH S UKUK

This is an instrument based on a mudarabah contract. A mudarabah is an investment part-
nership whereby an investor (also called rabbulal-mal, or owner of money) agrees to provide
money to another party (also called mudarib, or entrepreneur) in order to invest the same or
undertake a business activity. Profits are distributed on the basis of a pre-agreed formula,
while losses are borne exclusively by the investor.
With respect to mudarabah sukuk, holders subscribe to certificates issued by the mudarib
(entrepreneur) and share the profit with him, but bear any losses arising from the mudarabah
operations. The returns to the holders are dependent on the revenue generated by the under-
lying investment.
A mudarabah sukuk is based on dividing the mudarabah equity by issuing units of equal
value. Sukuk represent a common ownership of mudarabah equity and are registered in the
names of holders.
On the expiry of the specified time period of the subscription, sukuk holders are given the
right to transfer the ownership by sale or trade in the securities market at their discretion.
Subscription in sukuk is considered as an offer from the investors and approval of the issuer
is then regarded as acceptance of the contract.
About Sukuk
MUSHARAKAH SUKUK
This is an instrument based on a musharakah contract. Musharakh sukuk are very similar to
mudarabah sukuk. A musharakah is an equity participation contract whereby the partners or
shareholders (usually the banks and the clients) contribute jointly to finance a project. Profits
and losses are split according to a pre-agreed formula.
Musharakah may be considered as a form of partnership. Musharakah sukuk represent a
fractional ownership in the capital of an enterprise or project. Sukuk holders are entitled to a
proportionate share of the profits and assume a proportionate share of the losses, based on
agreed profit- and loss-sharing ratios. Musharakah sukuk can be treated as negotiable instru-
ments and can be bought and sold in the secondary market. However, trading in these certifi-
cates is not allowed when all the assets of the musharakah venture are still in liquid form (i.e.
in the shape of cash or receivables).
MURABAHA SUKUK
Sukuk based on a murabaha contract. Murabaha is a form of asset-based finance whereby the
capital provider (financial institution), instead of lending out money, purchases a commodity
(equipment, property, etc.) on the request of a client, and resells it at a predetermined higher
price to the client. The latter will pay the price in installments, obtaining thereby credit with-
out paying interest.
Murabaha sukuk represent a proportionate ownership of the commodity and sukuk holders
are entitled to the final sale price of the commodity. The possibility of having legally accept-
able murabaha-based sukuk is only feasible in the primary market. The negotiability of these
sukuk or their trading at the secondary market is not permitted by Sharia'ah. Despite being
debt instruments, murabaha sukuk could be negotiable if they are the smaller part of a pack-
age or a portfolio, the larger part of which is constituted of negotiable instruments such as
mudarabah, musharakah or ijara sukuk.
HYB RI D SU KU K
Considering the fact that the issuance and trading of sukuk are important means of invest-
ment and based on the demands of investors, more diversified sukuk, called hybrid sukuk or
mixed-asset sukuk, have emerged in the market.
In hybrid sukuk, the underlying pool of assets can comprise istisna'a or murabaha receivables
as well as ijara receivables. Having a portfolio of assets comprising of different classes allows
for a greater mobilization of funds. However, as murabaha and istisna'a contracts cannot be
traded on secondary markets as securitized instruments, at least 51 percent of the pool in a
hybrid sukuk must comprise sukuk that are tradable in the market, such as ijara sukuk. As
the pool includes murabaha and istisna’a receivables, the return on these sukuk can only be a
pre-determined fixed rate of return.
About the Sukuk module

In DMFAS, sukuk are recorded as a distinct category of instruments in a separate module.
This module lets you record data about short-, medium- and long-term sukuk. The module is
organized as follows:
• Short-term Sukuk - Discount
• Short-term Sukuk - Return Bearing
• Zero Coupon Sukuk
• Fixed Return Sukuk
• Floating Return Sukuk
• Other Sukuk
Depending on the Islamic instrument you are working with, the structure of the DMFAS win-
dow you use to record data can be simple or complex.
A simple structure consists of one window made up of the following tabs:
Characteristics, Participants, User Info, User Info 5.3, Subscription, Return (for return-bearing instru-
ments), Amortization Table, Budget Lines, Pricing, Personal Notes, Attachments
A complex structure is used for an Islamic instrument which may have series; it involves a set
of three windows made up of a number of tabs:
Window Tabs
General Information Characteristics, Participants, User Info, Personal Notes,

Attachments
Series Series Info, Participants, Subscription, User Info, Principal, Return,

Amortization Table, Pricing
Fees Terms, Payment Schedule
Furthermore, two other modules in DMFAS relate to sukuk: sukuk subscriptions and debt
service for sukuk.
You can also generate numerous types of reports for sukuk; for example, standard opera-
tional reports such as a sukuk information sheet, a sukuk account statement, etc.
About the Sukuk module
Note that all the windows and fields in the Sukuk module are described in detail in the
DMFAS 6 on-line help.
Above the window for short-term sukuk (discount) which has a simple structure in DMFAS.
PART 6
Registering Non-Debt Agreements
182
Registering Grants
About
About this
this chapter
chapter
What are grants?to DMFAS

How the windows are organized

184 Part 5 Registering Non-Debt Agreements
About the Grants module ...................................................................................................185
How to access .................................................................................................................................... 185

What are grants? .............................................................................................................................. 185
How the windows are organized ........................................................................................................ 185
Chapter 13 Registering Grants 185
About the Grants module
About the Grants module

The Grants module is used to register or update information relating to grants. You begin by
entering data about the grant agreement in the main window. This window in turn provides
access to dialog boxes for recording estimated drawings, allocations and historical data relat-
ing to amendments and status.
HOW TO ACCESS
 From the Portal, select Grants.
WHAT ARE GRANTS?

A grant is a legally binding obligation for the disbursement of a specified value of funds for
which repayment is not required.
HOW THE WINDOWS ARE OR GANIZED

The Grants window consists of the following tabs in which you can enter data.
Agreement Info 1, Agreement Info 2, Participants, User Info, Notes and Attachments
In the first three tabs, which are mandatory, you enter the basic characteristics of the grant
including identification, agreements dates, the agreement authorization, participants and use
of funds.
The Notes tab provides you with a space in which you can enter any notes, comments or
observations you wish to record regarding the grant. Feel free to enter as much detailed infor-
mation as you like.
In the Attachments tab, you can insert a file or document to be stored with the grant. This
means that when you retrieve the grant, you will have access to this file or document. For
example, you can attach any of the following: a Word document, an Excel spreadsheet, a PDF
file or a simple text file.
From the first tab, you can gain access to the dialog boxes described below.
The (Estimated) Drawings dialog box

In the Drawings dialog box, you can confirm the calculation method that DMFAS uses by
default to create estimated drawings or select another one. For a detailed explanation of this
dialog box, refer to the corresponding sections in Chapter 7, “Registering Loan Agreements”.
The Allocations dialog box

The Allocations dialog box is used to record a link between the grant and allocations to
projects or economic sectors. Recording allocations is optional.
The list of values for economic sectors needs to be customized by your DMFAS administra-
tion according to your institution’s needs.

The Status History dialog box is used to consult all the status changes to the grant throughout
its life cycle. Status changes are recorded directly by modifying the field. A dialog box called
Modifications appears prompting you to indicate whether the change is a correction or an
amendment.

The Amendment History dialog box is used to consult the various amendments to a grant
whenever they apply to the amount, the effective limit date or the drawing limit date. When
you modify one of these fields, a dialog box called Modifications appears prompting you to
indicate whether the change is a correction or an amendment.
Registering On-lent Loans
About
About this
this chapter
chapter
What is on-lending?

The on-lending mechanism

Debt classification of on-lending
How to use the windows
About the On-lent Loans module .......................................................................................189
How to access the module .................................................................................................................. 189

What is on-lending? ........................................................................................................................... 189
The on-lending mechanism ............................................................................................................... 190
Debt classification of the on-lending of borrowed funds ..................................................................... 191
How to use the windows of the module ............................................................................................. 191
About the On-lent Loans module

This module is used to register loans on-lent by the government or a public entity. Unlike
other loans registered in DMFAS, an on-lent loan, in terms of accounting, is an asset, not a lia-
bility. The underlying principles of such loans, and the specific actions they require in
DMFAS, are discussed in this chapter.
The windows of this module are almost identical to those that appear in the Loans module.
HOW TO ACCESS THE MODULE

To access the module:
 From the Portal, click On-lent Loans.
WHAT IS ON-L ENDING?

On-lending occurs when funds are borrowed by a government or a domestic financial institu-
tion (normally public and acting on behalf of the government) with the aim of lending these
funds to public sector entities. The loan proceeds are to be made available, through an on-
lending agreement, to a third party within the country of the borrower, usually with the pre-
vious agreement of the foreign creditor.
Public-sector borrowers often seek the assistance of the government when it is difficult or
impossible to obtain credit. A publicly-guaranteed loan is one modality. In other cases, the
government borrows funds and on-lends them to the final borrowers.
The legal basis for on-lending operations is generally set forth under the government’s public
debt management laws. The government can use multiple channels for on-lending such as
the Ministry of Finance or government agencies established for on-lending in specific sectors.
When the Ministry of Finance does not on-lend funds directly to the final borrowers, it estab-
lishes the terms and conditions for on-lending agreements with agencies that subsequently
channel the on-lent funds. Thereafter these agencies assume full responsibility for the man-
agement of all the individual loans they extend. Individual borrowers make debt service pay-
ments to the on-lending agency which then transfers these funds to the Ministry of Finance.
THE ON-L ENDING MECHANISM
On-lending means two agreements

On-lending entails two distinct agreements:
• the direct loan between the creditor (usually the World Bank or a regional development
bank) and the government, where the government is the debtor and assumes the debt
service, and
• the on-lent loan between the government and a public-sector enterprise (where the
government is the creditor).
These relationships are depicted in a simplified manner in the diagram below:
More complex on-lending agreements can exist. These may involve more than one public entity as creditor and/or
several public sector enterprises as debtors.
The direct loan is registered in the Loans module while the on-lent loan is registered in the
On-lent Loans module.
Terms of the on-lent loan

Very often the terms of the direct loan and on-lent agreement will differ, for example in the
amount, repayment terms, etc.
The repayment of a loan depends on the terms and conditions in the agreement between the
government and the lender. Nevertheless, the repayment period usually does not exceed the
date stipulated in the direct loan.
Furthermore, whenever a government contracts a loan under commercial conditions and
then makes it available in the form of sub-loans in foreign currency, it usually applies the
interest rate and fees it owes to the lender plus an annual, domestic on-lending fee. It may
also charge a preferential interest rate for certain categories of projects, for example, in the
social sector, or for reconstruction costs following a national disaster.
DEBT CL ASSIFICATION OF THE ON-LENDING OF BORROWED FUNDS
The IMF’s External Debt Statistics: Guide for Compilers and Users1 provides the following guide-
lines on the debt classification of on-lent loans:
An institutional unit within an economy might borrow funds from a non-resident and then on-lend the
funds to a second institutional unit within the economy. In such instances, the first institutional unit
should record an external debt liability, with any subsequent on-lending classified as a domestic claim/
liability.
If an institutional unit within an economy borrowed from a non-resident and on-lent the funds to a non-
resident, the unit should record both external debt and an external claim.
RECOMMENDATION
When producing debt reports for your institution, you must remember to exclude on-lent
loans from the set of loans selected for the report.
HOW TO USE THE WINDOWS OF THE MODULE

You begin by recording data in the General Information window as you would for any other
type of loan. Here you record all the basic information about the on-lent agreement such as
different references, the signature date and the availability date. Note that the creditor should
be a government entity (for example, the Ministry of Finance) while the debtor is the third
party receiving the funds. You also need to define the loan’s tranche structure and partici-
pants (borrowers, guarantors, beneficiaries, etc.) at the loan level.
In the Tranches window, you record all the data relating to the tranches of a loan: estimated
drawings, interest terms and principal repayment terms. You can also record tranche alloca-
tions and participants at the tranche level. Using this information, DMFAS automatically cal-
culates amortization tables. With respect to an on-lent loan, the amortization table shows the
principal and interest terms due from the third party.
The Tranches window is also where you establish a link with the direct loan from the On-
lending module; here you select the direct loan that is the source of the on-lending agreement.
Finally, you record the loan’s commissions and fees in a separate window since you can enter
this information at both the loan and tranche levels.
The windows you use to register on-lent loans are the same as those in the Loans module.
The fields in the General Information window are identical to those in the Loans module.
The fields in the Tranches window are also identical to those in the Loans module except
that you can link the on-lent loan with the direct or source loan through the On-lending
dialog box.
For more explanations on these windows, refer to Chapter 7, “Registering Loan

Agreements”.
1. Appendix I, part 2.
PART 7
Mobilizing Funds
194
Recording Real Drawings on Loans
About
About this
this chapter
chapter
An
to DMFAS
concept of drawings

How DMFAS calculates and checks amounts

How you should check amounts
Where to get information on real drawings?
Roll Forward Estimated Drawings
196 Part 6 Mobilizing Funds
About the Loan Drawings module ......................................................................................197

The Real Drawings on Loans window ................................................................................................. 197
The concept of drawings .................................................................................................................... 198
What happens when a real drawing is recorded? ................................................................................ 199
Prerequisites for recording a real drawing .......................................................................................... 199
Creating a tranche from the Real Drawings window ............................................................................ 199

How you should check amounts ..........................................................................................200
Loans with only one tranche ............................................................................................................... 200

Loans with known tranches ................................................................................................................ 201
Loans with unknown tranches ............................................................................................................. 201
How DMFAS manages the undisbursed amount .................................................................................. 201
Change a real drawing entered in the wrong tranche ......................................................................... 202
Change or correct the amount of a real drawing ................................................................................. 202
Correct an amount changing the exchange rates ................................................................................ 203
Correct a real drawing recorded in the wrong effected currency .......................................................... 203
Cancel the remaining undisbursed amount after recording the last drawing ........................................ 203
Where to get information on real drawings? ........................................................................203
Roll forward estimated drawings .........................................................................................204

About the Loan Drawings module

Once a registered loan agreement becomes effective, the next module to use is Loan Draw-
ings. As drawings are made, you can record them one by one in this module.
This chapter covers only the recording of current drawings. For information on how to record
historical drawings, refer to Chapter 3, “Recording Historical Data and Operations”.
HOW TO ACCESS THI S MODULE

 From the Portal, click Loan Drawings.
THE REAL DRAWINGS ON LOANS WINDOW

The Real Drawings on Loans window consists of four tabs.
The Drawings Info tab contains all the essential data relating to the drawing including the
instrument ID, drawing-related dates, the exchange rate date and amounts in different cur-
rencies.
observations you wish to record regarding the drawing.
Using the grid in the Drawing Requests tab, you can associate one or more drawing requests
to a loan drawing. To be able to use this new facility, you must first have created the drawing
requests in the new related window under:
 Mobilization > Drawing Requests > Loans.
What is the difference between the fields in the Drawing Requests tab and those
in the Drawings Info tab?
In the Drawings Info tab, the Request Number field lets you associate only one drawing
request to a loan drawing. Depending on the configuration of DMFAS at your site, the draw-
ing request number must be entered manually or selected from a list of values.
If you use the Drawing Requests tab, you can assign more than one drawing request to a
loan drawing. The relationship is therefore 1 to many and many to 1, as opposed to 1 to 1.
Either system can be used by an institution depending on its needs.
For more information on drawing requests, refer to Chapter 18, “Registering Drawing
Requests”.
The New Drawing button in the Drawings Info tab allows you to record another drawing for
the same loan without exiting from the window. DMFAS clears the tab while maintaining the
values in the Instrument group box.
THE CONCEPT OF DRAWINGS
What is a real drawing?

A drawing is the placement of resources such as goods, services or funds at the disposal of
the borrower or beneficiary country taken against a loan agreement. A “drawing” is the same
thing as a “disbursement” from the point of view of the borrower. In DMFAS drawings can be
registered either in cash, in kind or as a direct payment.
Drawings take the form of a direct payment when the beneficiary or debtor beneficiary of a
loan requests the creditor to pay a third party directly from the loan.
DMFAS also lets you record drawings resulting from loans agreed upon during a reorganiza-
tion process or a swap. The “reorganization” code is used for refinancing loans, the drawings
of which are used to cover the maturities of a reorganized loan, which is a means to defer its
repayment.
WHAT HAPPENS WHEN A REAL DRAWING IS RE CORD ED?

Real drawings affect not just current balances but also the interest calculated over the dis-
bursement period and any remaining estimated drawings. In fact, when a real drawing is
recorded:
• DMFAS automatically reduces the undisbursed amount of the tranche(s)—except in
the special case where a negative drawing is recorded. For loans with unknown
tranches (tranche management option 2), DMFAS reduces the amount of tranche 0; for
all other tranches, the tranche amount is always equal to the sum of all the tranche’s
real drawings, and the undisbursed portion is always equal to zero.
• DMFAS automatically recalculates estimated drawings of the tranche(s): it deletes the
estimated drawings before the effected date of the real drawing and redistributes the
new amount available as estimated drawings. For loans with unknown tranches
(tranche management option 2), DMFAS recalculates only estimated drawings for
tranche 0.
• DMFAS recalculates the amortization table.
PREREQUISITES FOR RECORDING A REAL DRAWING

You can record a real drawing only if the undisbursed amount of the loan is at least equal to
the amount of the real drawing. DMFAS always checks that the amount of the drawing in the
loan currency (for loans with one tranche or unknown tranches) or the tranche currency
(loans with known tranches) does not exceed the undisbursed amount of the loan (or
tranche).
Also remember that the date of the drawing must be within the drawing period, that is, the
period from the effective date (the date on which the first drawing can be made) to the draw-
ing limit date (both recorded in the General Information window). However, if a drawing
took place after the drawing limit date, this means that the loan has been amended. In order
to record the drawing, you need first to modify the drawing limit date and record it as an
amendment to the loan agreement.
RECOMMENDATION
Before recording a real drawing, be sure to record all the exchange rates that DMFAS needs to
calculate certain amounts automatically. You do this in the Exchange Rates reference file.
These exchange rates include the local currency, the loan currency, the tranche currency, the
U.S. dollar, the euro and the effected currency. You should record exchange rates directly from
the Real Drawings window only on an exceptional basis, for example, for a currency which is
not frequently used.
CREATING A TRANCHE FROM THE RE AL DRAWINGS WINDOW

If a loan has been recorded with tranche management option 2 (unknown number of
tranches), you can easily create a new tranche by recording a real drawing and assigning it a
new tranche number. DMFAS then automatically creates the tranche which you can retrieve
from the Loans module to complete its interest and principal terms.
H o w D M FA S c a l c u l a t e s a n d c h e c k s a m o u n t s
The Real Drawings window contains fields for amounts in various currencies: effected cur-
rency, tranche currency, loan currency and local currency as well as the euro and U.S. dollar.
THE AUTOMATIC CALCULATION OF AM OUNTS

After you have completed the Amount Effected Currency field, DMFAS automatically calcu-
lates the other amounts (using the date for the local exchange rates), provided that the corre-
sponding exchange rates are available in the Exchange Rates reference file. Although you
don’t see it, it also calculates the amount in SDR. DMFAS also automatically calculates the
amount in local currency provided that the parameter Operations in local currency is activated
in the DMFAS Control Panel.
AN AUTOMATIC CHECK FOR CONSISTENCY IN AMOUNTS

You can modify the amounts calculated by DMFAS. DMFAS then checks the new amounts for
consistency by computing the derived exchange rates from these amounts and comparing
them with the corresponding rates in the Exchange Rates reference file.
In doing so, it checks that the amounts fall within the exchange rate tolerance factor defined
in the DMFAS Control Panel by the database administrator during the installation of the sys-
tem. By default, it uses a tolerance factor of ±5%.
How you should check amounts

This section explains how and why you should check amounts for consistency with creditor
amounts, depending on the tranche management option selected for the loan.
LOANS WITH ONLY ONE TRANCHE

The loan and tranche currency are the same and, in general, the effected currency of a draw-
ing is the loan currency. Sometimes, however, a real drawing can be effected in another cur-
rency. If so, DMFAS calculates the amount in the loan currency using the exchange rate of the
effected currency. The exchange rate used is the one recorded in the Exchange Rates reference
file at the date recorded in the Date Local Exchange Rate field.
Check the amount in the loan currency

Whenever the effected currency is not the same as the loan currency, you must check that
the amount in the loan currency calculated by DMFAS is equal to that calculated by the
creditor. A discrepancy may result in an erroneous undisbursed amount. It occurs when
the exchange rates recorded in the reference file differ from those of the creditor.
You notice that the undisbursed amount is erroneous when, while recording the last drawing,
you encounter one of two cases:
• You cannot record the last drawing because it is greater than the undisbursed amount;
or
• A small undisbursed amount remains because the last drawing is less than the undis-
bursed amount.
One solution is to change the amount of the last real drawing. You can change this amount as
long as it falls within the tolerance factors defined in the DMFAS Control Panel.
However, if a modified amount falls outside a tolerance factor, you must change the exchange
rate accordingly.
LOANS WITH KNOWN TRANCHES

An identical situation as the one described above may occur for a given tranche. The differ-
ence is that you must check the amount in the tranche currency rather than in the loan cur-
rency.
LOANS WITH UNKNOWN TRANCHES

Until real drawings have been made, the amount of tranche 0 is equal to the loan amount.
Once a real drawing is recorded in a tranche, DMFAS reduces the amount of tranche 0 by the
amount in the loan currency. DMFAS calculates this amount from the exchange rate of the
effected currency; the exchange rate used is the one recorded in the Exchange Rates reference
file at the date entered in the Date Local Exchange Rate field.
Therefore, a situation such as the one mentioned above may arise if the effected currency of a
drawing differs from the tranche and loan currency.
HOW DM FAS M ANAG ES TH E UNDIS BURS ED AMOUNT

This table summarizes how DMFAS manages the undisbursed amount according to the
tranche management option. It indicates the checks you should perform on the amounts in
the loan or tranche currency whenever this currency is different from the effected currency.
Loans with known Loans with

Loans with one tranche
tranches unknown tranches
DMFAS calculates for that tranche for each tranche for tranche 0
the undisbursed
amount:
The undisbursed Loan amount Tranche amount Loan amount

amount is equal to
minus minus minus
Sum of real drawings Sum of real Sum of real

in the loan currency drawings in the drawings in the
tranche currency loan currency
In Real Drawings
If the effected the loan currency: the tranche the tranche or loan
currency is NOT currency: currency:
DMFAS calculates the DMFAS calculates DMFAS calculates

amount in the loan the amount in the the amount in loan
currency using the tranche currency and tranche
exchange rate at the using the exchange currency using the
date recorded in the rate at the date exchange rate at
Date Local Exchange recorded in the the date recorded
Rate field. Date Local in the Date Local
Exchange Rate Exchange Rate
field. field.
...then check the drawing amount in drawing amount in drawing amount

following: loan currency = tranche currency = in tranche and
creditor’s amount? creditor’s amount? loan currency =
creditor’s
amounts?
CHANGE A REAL DRAWING ENTERED IN TH E WRONG TRANCHE

What happens if you enter a real drawing in the wrong tranche? Can you correct an error?
The action you need to take is summarized below.
If the tranche where the drawing

...then do this:
should have been entered...
is in the same currency as the wrong Change the tranche number.

tranche
is in a currency different from that Delete the drawing and record it in the correct
of the wrong tranche tranche.
does not exist Delete the drawing, create the new tranche and
record the drawing in that tranche.
Special Case
Loans from the Asian Development Bank (as well as other institutions) have drawings made
in various currencies and the debtors do not know in advance the currency of repayment.
Therefore, these loans can be recorded with tranche management option 2 (unknown
tranches), where estimated drawings are kept in one tranche (tranche 0) until the loan is fully
disbursed. When you know the currency of repayment, you can apply the above guidelines
to distribute drawings into tranches in the relevant currency.
CHANGE OR CORRECT THE AMOUNT OF A RE AL DRAWING

Once you have entered a real drawing, you can always change or correct its amount follow-
ing the guidelines that apply to the cases described below.
The creditor disbursed by mistake an amount larger than the normal amount
In that case, the excess disbursement must be reimbursed to the creditor:
 Enter a new drawing as a negative amount equivalent to the reimbursement
to the creditor.
This is the only appropriate procedure because the initial drawing generated interest: when
you record a negative amount, DMFAS takes it into account in the calculation of interest.
You recorded an erroneous amount in the effected currency

 Correct the amount of the initial drawing.
When you correct an amount, DMFAS automatically updates amounts in the loan, tranche
and local currency as well as in U.S. dollars and in euros.
CAUTION
If you change or correct a drawing amount before the payment of the interest falling due,
then DMFAS recalculates the interest.
If you change or correct a drawing amount after interest has been paid, DMFAS cannot recal-
culate the interest.
Where to get information on real drawings?
The amount in the loan currency or in the local currency does not correspond to
the creditor’s amount
 You can change the amount as long as it falls within the tolerance factors
defined in the DMFAS Control Panel. Otherwise, you must change the
exchange rate accordingly.
CORRECT AN AMOUNT CHANGING THE EXCHANGE RATE S

When the amount in the loan currency of the last drawing is not equal to the undisbursed
amount of the corresponding tranche (or tranche 0), you must correct its amount.
The ideal solution would be to correct every drawing that has been recorded. But that may
prove tedious and time-consuming when there are many drawings.
In such a case, the proposed solution is to enter (or correct) the last drawing using appropri-
ate exchange rates. It can always be applied regardless of whether the tranche option selected
is one, known or unknown.
CORRECT A REAL DRAWING RECORDED IN TH E WRONG EFFECTED CURRENCY

To correct the effected currency of a drawing, re-enter the effected currency: all amount fields
are cleared except the Amount in Effected Currency.
Confirm the amount; DMFAS automatically updates the amounts in the loan, tranche and
local currency as well as in U.S. dollars and euros.
CANCEL TH E RE MAINI NG U NDISB URSE D AMOUNT AFTER RECORDING THE

L AST D R AWING
For loans financing projects, it happens that the entire amount of the loan is not used and that
a small amount of the loan remains undisbursed. In such a case, change the amount of the
loan to the undisbursed amount and then record the change as an amendment.
Where to get information on real drawings?

You can find information in the disbursement advices and the disbursement summaries pro-
vided by some creditors. Direct payments are always communicated on the creditor’s dis-
bursement advice.
For World Bank loans, the Client Connection web site of the World Bank provides borrowers
with an online access to information on their loan portfolio and the status of their disburse-
ment requests. Copies of the payment advice sent to the borrower and monthly disbursement
summaries are available.
We recommend that you use this information for recording real drawings in DMFAS.
Roll forward estimated drawings

A feature on the Utilities menu in DMFAS allows you to update or roll forward estimated
drawings up to a date you specify. This feature improves projections by eliminating estimated
drawings scheduled prior to this date. It is based on the assumption that estimated drawings
have not occurred and will not occur and, consequently, should be deleted.
For regular estimated drawings (automatic method), DMFAS performs the calculation using
the start date you recorded and applying the method’s periodicity from that date on. For
irregular estimated drawings (manual method), DMFAS calculates the first drawing for the
date you choose.
To roll forward estimated drawings:
1 Select Utilities > Roll Forward Estimated Drawings.
2 Fill in the necessary fields, and click the Re-estimate button.
Click the Amortization Update Log tab to view the list of roll forward actions.
Recording Debt Security Subscriptions
About
About this
this chapter
chapter
An
to DMFAS
concept of subscriptions

How DMFAS calculates and checks the amounts

About real subscriptions ......................................................................................................207

The concept of subscriptions ............................................................................................................... 207
What happens when a real subscription is recorded? ......................................................................... 207
Prerequisites for recording a real subscription ..................................................................................... 208

Chapter 16 Recording Debt Security Subscriptions 207
About real subscriptions
About real subscriptions

After registering a debt security, you should then proceed to record data about subscriptions.
In the Debt Security Subscriptions module, you can enter the subscription in the form of a
unique payment. The amount will be calculated in the other currencies by DMFAS. This was
the approach used in DMFAS 5.3 and which remains valid for version 6.
Another approach you can use is to create the subscriptions directly from the Debt Securities
module. The Real Subscriptions dialog box in the Subscription tab makes it possible to record
a summary of these subscriptions. In this way, DMFAS automatically creates the real sub-
scriptions which you can then retrieve from the Debt Security Subscriptions module (Mobili-
zation). DMFAS also updates the amortization table accordingly.
The chapter covers only the recording of current subscriptions. For information on how to
record historical subscriptions, refer to Chapter 3, “Recording Historical Data and Opera-
tions”.

 From the Portal, click Debt Security Subscriptions.
The Real Subscriptions window consists of three tabs.
The Subscriptions Info tab contains all the essential data relating to the subscription includ-
ing the instrument ID, subscription-related dates, the exchange rate date and amounts in dif-
ferent currencies.
observations you wish to record regarding the subscription.
THE CONCEPT OF SUBSCRIPTIONS
What is a real subscription?

A subscription is an agreement to buy newly issued debt securities. In DMFAS, a subscription
is the payment done to the issuer of a debt security by the subscriber, in the form of funds,
goods or services.
The different types of subscriptions you can record in DMFAS

In DMFAS you can record real subscriptions in cash or kind.
DMFAS also lets you record subscriptions related to a reorganization process or swap.
WHAT HAPPENS WHEN A REAL SUBSCRIPTION IS RECORDED?

Real subscriptions affect not just current balances but also the interest calculated over the sub-
scription period and any remaining estimated subscriptions. In fact, when a real subscription
is recorded:
• DMFAS automatically reduces the unsubscribed amount of the series.
• DMFAS recalculates the amortization table.
PREREQUISITES FOR RECORDING A REAL SUBSCRIPTION

You can record a real subscription only if the unsubscribed amount of the debt security is at
least equal to the amount of the real subscription. DMFAS always checks that the amount of
the subscription in the instrument currency does not exceed the unsubscribed amount of the
debt security (or series).
RECOMMENDATION
Before recording a real subscription, be sure to record all the exchange rates that DMFAS
needs to calculate certain amounts automatically. You do this in the Exchange Rates reference
file. These exchange rates include the local currency, the instrument currency, the series cur-
rency, the U.S. dollar, the euro and the effected currency.
The Real Subscriptions window contains fields for amounts in various currencies: effected
currency, series currency, instrument currency and local currency as well as the euro and U.S.
dollar.

lates the other amounts (using the date for the local exchange rate), provided that the corre-
sponding exchange rates are available in the Exchange Rates reference file. Although you do
not see it, it also calculates the amount in SDR. DMFAS also automatically calculates the
amount in local currency provided that the parameter Operations in local currency is activated
in the DMFAS Control Panel.

in the Control Panel during the installation of the system.
Recording Real Drawings on Grants
About
About this
this chapter
chapter
An
to DMFAS
concept of drawings

How DMFAS calculates and checks amounts

How you should check amounts
About the Grant Real Drawings module .............................................................................211
How to access this module ................................................................................................................ 211

What is a real drawing? ..................................................................................................................... 211
What happens when a real drawing is recorded? ............................................................................... 212
Prerequisites for recording a real drawing ........................................................................................... 212
How DMFAS calculates and checks amounts ......................................................................213

How you should check amounts .........................................................................................213

About the Grant Real Drawings module
About the Grant Real Drawings module

Once a registered grant agreement becomes effective, the next module to use is Grant Real
Drawings. As the drawings are made, you can record them one by one in this module.
In terms of structure, this module is very similar to the Loan Real Drawings module. It also
lets you customize fields according to your institution’s needs.
This chapter covers only the recording of current drawings. For information on how to record
historical drawings, refer to Chapter 3, “Recording Historical Data and Operations”.

 From the Portal, click Grant Drawings.
The Real Drawings on Grants window consists of four tabs.
The Drawings Info tab contains all the essential data relating to the drawing including the
instrument ID, drawing-related dates, the exchange rate date and amounts in different cur-
rencies.
observations you wish to record regarding the drawing.
Using the grid in the Drawing Requests tab, you can associate one or more drawing requests
to a grant drawing. To be able to use this new facility, you must first have created the drawing
requests in the new related window under:
 Mobilization > Drawing Requests > Grants.
What is the difference between the fields in the Drawing Requests tab and those
in the Drawings Info tab?
In the Drawings Info tab, the Request Number lets you associate only one drawing request to
a grant drawing. Depending on the configuration of DMFAS at your site, the drawing request
number must be entered manually or selected from a list of values.
If you use the Drawing Requests tab, you can assign more than one drawing request to a
grant drawing. The relationship is therefore 1 to many and many to 1, as opposed to 1 to 1.
Either system can be used by an institution depending on its needs.
For more information on drawing requests, refer to Chapter 18, “Registering Drawing
Requests”.
WHAT IS A REAL DRAWING ?

A drawing is the placement of resources such as goods, services or funds at the disposal of a
beneficiary country pursuant to a grant agreement. A “drawing” is the same thing as a “dis-
bursement” from the point of view of the beneficiary.
The different types of drawings you can record in DMFAS

In DMFAS, you can record real drawings on grants in cash or in kind.
WHAT HAPPENS WHEN A REAL DRAWING IS RE CORD ED?

When you record the operation, DMFAS reduces the undisbursed amount and deletes the
estimated drawings before the effective date of the real drawing; it distributes the new
amount available as estimated drawings.
PREREQUISITES FOR RECORDING A REAL DRAWING

You can record a real drawing only if the undisbursed amount of the grant is at least equal to
the amount of the real drawing. DMFAS always checks that the amount of the drawing in the
grant currency does not exceed the undisbursed amount of the grant.
Also remember that the date of the drawing must be within the drawing period, that is, the
period from the effective date—the date on which the first drawing can be made—to the
drawing limit date (both recorded in the General Information window). However, if a draw-
ing took place after the drawing limit date, this means that the grant has been amended. In
order to record the drawing, you need first to modify the drawing limit date and record it as
an amendment to the grant agreement.
RECOMMENDATION
Before recording a real drawing, be sure to record all the exchange rates that DMFAS needs to
calculate certain amounts automatically. You do this in the Exchange Rates reference file.
These exchange rates include the local currency, the grant currency, the U.S. dollar, the euro
and the effected currency. You should record exchange rates directly from the Real Drawings
window only on an exceptional basis; for example, for a currency which is not frequently
used.
How DMFAS calculates and checks amounts
The Real Drawings window contains fields for amounts in various currencies: effected cur-
rency, grant currency and local currency as well as the U.S. dollar and euro.

don’t see it, it also calculates the amount in SDR.


This section explains how and why you should check amounts for consistency with donor
amounts.
In general, the effected currency of a drawing is the grant currency. Sometimes, however, a
real drawing can be effected in another currency. If so, DMFAS calculates the amount in the
grant currency using the exchange rate of the effected currency. The exchange rate used is the
one recorded in the Exchange Rates reference file at the date recorded in the Date Local
Exchange Rate field.
Check the amount in the grant currency

Whenever the effected currency is not the same as the grant currency, you must check that
the amount in the grant currency calculated by DMFAS is equal to that calculated by the
donor. A discrepancy may result in an erroneous undisbursed amount. It occurs when the
exchange rates recorded in the reference file differ from those of the donor.
You notice that the undisbursed amount is erroneous when, while recording the last drawing,
you encounter one of two cases:
• You cannot record the last drawing because it is greater than the undisbursed amount;
or
• A small undisbursed amount remains because the last drawing is less than the undis-
bursed amount.
One solution is to change the amount of the last real drawing. You can then change this
amount as long as it falls within the tolerance factors defined in the Control Panel.
However, if a modified amount falls outside a tolerance factor, you must change the exchange
rate accordingly.
Recording Drawing Requests
About
About this
this chapter
chapter
one orto
DMFAS
Assigning several drawing requests to
 one real drawing

The Drawing Requests window
About Drawing Requests ....................................................................................................217
Linking one drawing request to one real drawing ................................................................................ 217

Linking several drawing requests to one real drawing or
linking one drawing request to several real drawings ........................................................................ 217
The Drawing Requests window ............................................................................................218

Chapter 18 Recording Drawing Requests 217
About Drawing Requests
About Drawing Requests

DMFAS provides several possibilities for assigning one or more drawing requests to draw-
ings for loans or grants.
LINKING ONE DRAWING RE QUEST TO ONE REAL DRAWING

In DMFAS 5.3, users could associate one drawing request with one real drawing via a link.
This required a link between DMFAS and another system. Via the link, the Request Number
field provided a list of values made up of data copied from this other system. With DMFAS 6,
this method remains valid. This method is selected by activating the parameter called Enable
Drawing Requests? in the Control Panel.
A second method is also now available. It involves entering request numbers directly. Conse-
quently, there is no list of values and users enter request numbers directly.
This method is selected by deactivating the parameter called Enable Drawing Requests? in the
Module Activation tab in the Module Parameters window of the Control Panel.
LINKING SEVERAL DRAWING REQUES TS TO ONE REAL DR AWING OR

L INKING ONE DRAWING REQUEST TO SEVERAL REAL DRAWINGS
With DMFAS 6, you can now associate several drawing requests with one real drawing of a
loan or grant, or you can associate one drawing request with several real drawings. The rela-
tionship is therefore 1 to many and many to 1, as opposed to 1 to 1.
To use this new feature:
1 Go to Mobilization > Drawing Requests > Loans or Grants.
2 Create drawing requests in this window.
3 When you create a drawing (Mobilization > Real Drawings on Loans or Grants), from
the new Drawing Requests tab, select the drawing request previously created.
The Drawing Requests window

For loans or grants, the window consists of three tabs: Drawing Request Info, User Info and
Notes. The first tab allows you to record the details of a drawing request, such as its type and
status.
In the Drawing Requests tab of the Real Drawings on Loans (Grants) window, you can then
select one or more drawing requests created previously.
PART 8
Debt Service
220
Recording Budget Allocations
About
About this
this chapter
chapter
is a budgetto
DMFAS
What allocation?

How to use the window

222 Part 7 Debt Service
About budget allocations ....................................................................................................223
How to access budget period allocations ........................................................................................... 223

What is a budget allocation? ............................................................................................................. 223
How to use this window ..................................................................................................................... 224
Where to get more information ......................................................................................................... 224
Chapter 19 Recording Budget Allocations 223
About budget allocations
About budget allocations

The module is used to record budget periods and their allocated amounts. It is intended for
institutions that wish to link debt service payments to their budget system.
HOW TO ACCESS BUDGET PERIOD ALLOCATIONS

 From the Portal, click Debt Service and from the left panel Budget Allocations.
The window is made up of two tabs:
The Fiscal Year Allocation tab is where you enter the essential data: the budget periods and
their allocated amounts.
WHAT IS A BUDGET ALLOCATI ON?

A budget allocation is an amount allocated in the budget to a specific budget line for a given
fiscal year. There is a specific budget line for principal, for interest and for commissions/fees.
The budget line allocation can be to a loan or a group of loans.
PREREQUISITES TO USE THIS WINDOW

To use this module to link debt service payments to budget line accounts, the Budget Active?
parameter must be activated in the Activate Budget Link tab of the Control Panel. Note that
the link is active at the date specified in the Start Date of Budget Link field in the Module
Activation tab.
Before you can use this module, one or more budget line accounts must already exist. To cre-
ate them, go to the Budget Lines reference files.
HOW TO USE THIS WINDOW

You use this window to define a budget period, select the budget lines (account numbers) to
be used during that budget period and define the amounts allocated to them.
DMFAS automatically deducts expenditures made against a budget line and calculates the
remaining balance. Once a budget line is overdrawn, DMFAS issues a warning and prevents
any payment when you try to record one.
The window also contains fields that you can customize according to your institution’s spe-
cific needs. These fields may be useful if a link to a budget administration system already
exists.
WH ERE TO GET M ORE I NFORMATION

For additional information on budget line accounts, refer to Chapter 4 in this guide.
20
Recording Debt Service Operations
About
About this
this chapter
chapter
An Introduction
What to DMFAS
are debt service operations?
Recommendations
Principal and interest
Commissions
Late interest
About the Debt Service Operations module ........................................................................227
How to access debt service operations ................................................................................................ 227

What is debt service? ......................................................................................................................... 227
What are debt service operations? ..................................................................................................... 227
The window of this module ................................................................................................................ 228
Support for HIPC and MDRI relief ...................................................................................................... 229
General recommendations for recording debt service operations ........................................................ 230
The Principal and Interest tab ..............................................................................................231

Processing scheduled payments .......................................................................................................... 232
The Commissions tab ..........................................................................................................235
Tolerance factor for commission operations ....................................................................................... 235

Processing scheduled payments ......................................................................................................... 236
The Late Interest tab .........................................................................................................236
The dialog boxes in this tab ................................................................................................................ 236

About the Debt Service Operations module

This module is dedicated to debt service operations for all instrument types recorded in
DMFAS: loans, on-lent loans, debt securities, sukuk and private external debt. These debt
operations include principal, interest, commission and late interest.
DMFAS provides an efficient system for managing real debt service operations with respect
to the scheduled payments in the amortization table.
Before using this module, be sure that complete data for the instrument exists. This includes
the general information as well as the specific principal, interest and commission terms.
With version 6, you can now record commissions and late interest within the same module.
H OW T O ACCES S D EB T S ER V I CE OPE RAT I ONS

From the Portal, click Debt Service. From the left panel, select the instrument.
Then click the Debt Service Operations menu.
W HAT I S D E BT SE R VI CE ?
Debt service relates to any payments made or to be made against an instrument: principal
repayment, interest, commission and late interest payments. “Actual” debt service is the
amount actually paid to satisfy a debt, “scheduled” refers to a set of payments contractually
required to be made during the life of a debt.
W HAT ARE D E BT S E R VI CE OPER ATI ONS ?

A debt service operation is any financial operation related to principal, interest, commission
and even late interest. In DMFAS, a debt service operation can take the form of:
• a prepayment (for loans)
• a buyback (for debt securities)
• a payment
• an arrear
• a rescheduling (in the context of debt service operations it covers only refinancing
operations)
• forgiveness, which is the voluntary cancellation of all or part of debt resulting from a
contractual arrangement between the creditor and the debtor
• a swap
• a stripping (for debt securities)
T HE WI N D OW OF TH I S MOD UL E
The main window

The module’s main window, called Debt Service Operations, is made up of three tabs:
• The Principal and Interest tab is used to record operations relating to principal and
interest including payment, rescheduling, forgiveness, arrears, prepayment and swap.
Operations can also be suspended.
• The Commissions tab is used to record operations relating to commissions including
payment, rescheduling, forgiveness, arrears, swap as well as suspension.
• The Late Interest tab allows you to record payments of late interest.
Window for the debt service operations of loans.
The dialog boxes

From the first two tabs, you can gain access to the following dialog boxes:
The Payment dialog box is used to record payments for maturities with a status of “waiting”,
“scheduled” or “arrear”. For local government debt, if you have linked the loan/debt secu-
rity with a fund which is allocated to its reimbursement, the Payment Fund dialog box lets
you view the fund information and, if needed, change it. The Arrears dialog box is used to
record as arrear the scheduled payments with a “waiting” status or to confirm unpaid
amounts as being in arrear.
Three of the links (Rescheduling, Forgiveness and Swap) take you to the same type of dialog
box. It is used to record maturities (with a status of “waiting”, “scheduled” or “arrear”) as
payments that are reorganized; that is either rescheduled, swapped or forgiven.
The Prepayment dialog box is used to record payments for loans which are in advance of the
scheduled dates. Buyback and Stripping dialog boxes apply to debt securities. A buyback is
the repurchase of a debt security while stripping is the transformation of a debt security into
zero-coupon bonds. A suspension is a technical and internal type of debt service operation
which stops temporarily the “waiting” status of a maturity to process the next “waiting”
maturity. This operation makes it possible to process maturities non-sequentially.
The Late Interest tab provides access to three dialog boxes relating to payment, rescheduling,
and forgiveness.
S U PPOR T FOR HI PC AN D MD RI R EL I EF
DMFAS is capable of supporting HIPC and MDRI relief with respect to debt service opera-
tions.
The Heavily Indebted Poor Countries (HIPC) Initiative is a comprehensive approach to debt
reduction for heavily indebted poor countries pursuing IMF- and World Bank-supported
adjustment and reform programs. Launched in 1996 by the IMF and World Bank, the Initia-
tive entails coordinated action by the international financial community, including multilat-
eral organizations and governments, to reduce to sustainable levels the external debt burdens
of the most heavily indebted poor countries. Following a comprehensive review in Septem-
ber 1999, a number of modifications were approved to provide faster, deeper and broader
debt relief and to strengthen the links between debt relief, poverty reduction and special pol-
icies (enhanced HIPC Initiative).
Launched in 2005, the Multilateral Debt Relief Initiative (MDRI) provides for 100 percent
relief on eligible debt from three multilateral institutions: IMF, International Development
Association (IDA) of the World Bank, and the African Development Fund (AfDF) to a group
of low-income countries. The initiative is intended to help them advance toward the United
Nations’ Millennium Development Goals (MDGs), which are focused on halving poverty by
2015.
Codes in the Execution Mode field

The Mode of Execution field provides the necessary codes to be used with the above types of
payments: HIPC relief and MDRI relief.
Aggregates for HIPC and MDRI relief

A due payment eligible for HIPC or MDRI relief is divided into two portions: a portion to be
paid to the creditor and a portion to be paid to a special national fund that represents the
HIPC or MDRI relief. For purposes of creating user-defined reports, the following aggregates
were created:
Aggregate Name No. Description

HIPC Relief, Principal 165 The total principal paid to the national fund
HIPC Relief, Interest 166 The total interest paid to the national fund
HIPC Relief, Commission 167 The total commission paid to the national fund
HIPC Relief, Total Debt Service 168 The sum of the aggregates 165, 166 and 167
Principal Excluding HIPC Relief 169 The total principal paid minus HIPC relief for principal
Interest Excluding HIPC Relief 170 The total interest paid minus HIPC relief for interest
Commission Excluding HIPC Relief 171 The total commission paid minus HIPC relief for
commission
Total Debt Service Paid Excluding 172 The sum of the aggregates 169, 170 and 171
HIPC Relief
MDRI Relief, Principal 173 The total principal paid to the national fund
MDRI Relief, Interest 174 The total interest paid to the national fund
MDRI Relief, Commission 175 The total commission paid to the national fund
MDRI Relief, Total Debt Service 176 The sum of the aggregates 173, 174 and 175
Principal Excluding MDRI Relief 177 The total principal paid minus MDRI relief for principal
Interest Excluding MDRI Relief 178 The total interest paid minus MDRI relief for interest
Commission Excluding MDRI Relief 179 The total commission paid minus MDRI relief for
commission
Total Debt Service Paid Excluding 180 The sum of the aggregates 177, 178 and 179
MDRI Relief
G E NE RAL R E COM MEN D ATI ONS FOR RE CORD I NG DE BT S E R VI CE OPE RAT ION S
Below are some recommendations to help you record debt service operations accurately and
on a timely basis.
Related area: Recommendations:
Communication of payment-related - Ensure that billing advices are communicated to

information the debt service.
- Ensure that the debt service department is

informed about the execution of payments.
Follow-up of scheduled payments - Produce for each coming month a report with all
and timely recording of debt service scheduled maturities, by creditor, by loan and by
operations tranche.
- Monitor payments with concerned entities, for

example, the budget department, the Treasury, the
central bank, etc. in order to avoid “technical”
arrears.
Accuracy of recorded operations - Check that drawings have been recorded as the
exact calculation of interest depends on them.
- Check that amounts requested by creditors

correspond to due amounts as they appear in the
amortization table.
- Record only effective payments.
Validation of recorded data - Reconcile regularly payments recorded in

DMFAS with accounting entries of the Treasury.
- Reconcile regular payments recorded in DMFAS

with creditor data (using the loan/debt security
account statement).
RECOMMENDATION
Once you’ve recorded a set of payments for a loan (or a debt security), be sure to print out the
loan/debt security account statement to check all the data you entered. You should then file
this report in the appropriate loan/debt security folder.
The Principal and Interest tab

S CH ED U LE D D E BT S E R VI CE AND ACTU AL D E BT S E R V I CE
The Principal and Interest tab shows scheduled payments of principal or interest and their
status:
• “scheduled” for payments not yet due at today’s date
• “waiting” for payments due but for which you have not yet taken any action.
As you record debt service operations (payment, creation of an arrear, etc.), the window
changes accordingly to reflect the current status and thus the actual debt service. The differ-
ent types of status and their meaning are summarized below.
Status Meaning User action?
Scheduled Maturity which is part of the If there are no maturities in

scheduled debt service, that is, waiting, you can record all
not yet due. operations except arrears.
Waiting All maturities for which no Record a debt service

debt service operation has operation: payment,
Scheduled debt
been recorded at their arrears, forgiveness,

scheduled date. rescheduling or swap.
service
Suspended A maturity stopped Delete the suspended

temporarily so others can be operation: it returns to
processed non-sequentially. “waiting” status.
Paid The maturity has been -

recorded as a payment.
Arrear The maturity has been The arrear can be paid,

recorded as an arrear. rescheduled, forgiven or
swapped.
Arrear paid The arrear has been paid. -
Arrear rescheduled The arrear has been -

Actual debt service
rescheduled.
Arrear forgiven The arrear has been forgiven. -
Arrear swapped The arrear has been swapped. -
Rescheduled The maturity has been -

recorded as a rescheduling.
Prepaid The maturity has been -

recorded as prepaid.
Buyback The maturity has been

recorded as buyback.
Forgiven The maturity has been

recorded as forgiven.
Swap The maturity has been -

recorded as swapped.
Stripped The maturity has been -

recorded as stripped.
PROCE S SI N G S CHE D U LE D PAYME NT S

You must process the scheduled payments in a strictly sequential manner.
This means that:
• Maturities with a “waiting” status always have priority: you must select the first one
(the oldest) that appears in the list.
• If all maturities have the “scheduled” status, you must select the first one (the oldest)
that appears in the list.
Once you have selected a maturity, you just need to click the link corresponding to the
required operation: payment, arrears, rescheduling, forgiveness, prepayment or swap.
The Payments dialog box
How DMFAS calculates and checks amounts

The Payments dialog box contains fields for amounts in various currencies: effected currency,
tranche currency, loan currency, general agreement currency and local currency as well as the
euro and U.S. dollar.
- The automatic calculation of amounts

don’t see it, it also calculates the amount in SDR.
- An automatic check for consistency in amounts

You can modify the amounts calculated by DMFAS. DMFAS then checks the new amounts
for consistency by computing the derived exchange rates from these amounts and comparing
Tolerance factors for real payments

When a real payment is larger than the scheduled payment in the amortization table, DMFAS
checks that the real payment does not differ from the scheduled one by more than the toler-
ance factor.
Tolerance factors are activated for principal and interest payments, and are applied differ-
ently for normal loans and currency pool loans.
Tolerance factors are part of the DMFAS Control Panel and are set during the first-time instal-
lation of DMFAS. For a complete description of these parameters, see the DMFAS Control
Panel User’s Guide.
- Tolerance factor for normal loans

By default, the tolerance factor for principal payments is +1,000 units in the tranche currency.
DMFAS rejects any payment exceeding this limit.
EXAMPLE 1
If the scheduled payment is 193,000 USD (the USD is the tranche currency), DMFAS will
accept a real payment of 194,000 USD.
By default, the tolerance factor for interest payments is 99% in the tranche currency. DMFAS
rejects any payment exceeding this limit.
EXAMPLE 2
If the scheduled payment is 10,000 USD (the USD is the tranche currency), DMFAS will
accept a real payment of 19,900 USD.
- Tolerance factor for currency pool loans

For currency pool loans, DMFAS activates the tolerance factor for principal and interest pay-
ments after the pool adjustment factor has been applied to them.
The pool adjustment factors

DMFAS first applies the pool adjustment factor to the scheduled maturity. The adjust-
ment factor is defined in the Adjustment Factors window (Debt Service > Loans >
Adjustment Factors).
The tolerance factor

For a principal payment, DMFAS then checks the real payment on the basis of the previ-
ous amount to which it applies the tolerance factor set by default to +1,000 units in the
tranche currency.
For an interest payment, DMFAS then checks the real payment on the basis of the previ-
ous amount to which it applies the tolerance factor set by default to 10% in the tranche
currency.
Even if a payment meets the tolerance factors, DMFAS issues a warning prompting you to
confirm whether you wish to record such an amount.
EXAMPLE 1
3
Suppose that the principal scheduled payment is 10,000 USD (the USD is the tranche cur-
rency) and the adjustment factor is 1.4.
The amount after the application of the adjustment factor = 14,000 USD.
Application of the tolerance factors (+1,000 units) = 15,000 USD.
DMFAS will accept a real payment up to 15,000 USD.
Correspondence between real payments and scheduled payments

In the majority of cases, real payments should correspond to scheduled maturities. Neverthe-
less, sometimes real payments may differ from scheduled ones.
- Real payments can be larger than scheduled payments

For example, loans belonging to a currency pool system or loans with interest payments in
SDR or in Units of Account can have real payments greater than expected.1
1. Although expressed in SDR, loans from the Asian Development Fund, recorded with calculation meth-
od 71 cannot have real payments that are larger than scheduled payments.
- Real payments can be smaller than scheduled payments

For example, a payment can be partially paid and the difference recorded as an arrear; or the
real payment can be smaller because of a slight difference between the payment advice sent
by the creditor and the amount in DMFAS, especially for interest payments.
Compared to the DMFAS User

scheduled payment, the
real payment is:
Larger Accepts the amount if it does not

exceed the tolerance factor
Rejects the amount if it exceeds the

tolerance factor
(See Tolerance factors for real

payments above)
Smaller Records the difference:

(partial payment) - as an arrear
- as a remainder of the
maturity with its
original status:
waiting or scheduled
or
Deletes the difference
The Payment Fund dialog box

This dialog box is used in the context of local government debt where you have linked the
instrument with a fund allocated to its reimbursement. For more information on local gov-
ernment debt, see Chapter 9 of this guide.
The Arrears dialog box

You can directly record an arrear selecting a maturity with a “waiting” status and clicking the
Arrear link.
You can also record an arrear indirectly when you carry out a partial payment: you confirm
that the difference is to be recorded as an arrear.
The Rescheduling, Forgiveness and Swap dialog boxes
These dialog boxes are used to record operations relating to rescheduling, forgiveness or
swap. Except for a prepayment or backback, the maturities must have a status of “waiting”,
“scheduled” or “arrear”.
The Prepayment and Buyback dialog boxes

Prepayments or buybacks can be recorded only for maturities with a “scheduled” or “wait-
ing” status provided that there are no previous maturities with a “waiting” or “arrear” status
before the prepayment or buyback date. The prepayment or buyback must be before the
“waiting” date.
The Commissions tab
The Commissions tab

Commission operations are similar to those for principal and interest. Therefore, to avoid
repeated information, this section focuses on the Commissions tab and the Payments dialog
box. This means that definitions and detailed explanations provided previously also apply to
this tab; you should refer to them when working with commission operations.
TO LERANCE FACTOR FOR COMMISSION OPERATIONS

For commission operations, a tolerance factor may have been set in the Control Panel:
Commission tolerance %. If this parameter is activated, then DMFAS rejects any commission
payment that differs from the scheduled payment (in the tranche/series currency) by more
than the tolerance factor.
SCHEDU LED DEBT SER VICE AND ACTUAL DEBT SER VICE
The Commissions tab shows scheduled payments and their status:
• “scheduled” for payments not yet due at today’s date
• “waiting” for payments due but for which you have not taken any action.
As you record commission operations (payment, creation of an arrear, etc.), the tab changes
accordingly to reflect the current status and thus the actual debt service.
Status Meaning User action?
Scheduled Maturity which is part of the If there are no maturities

scheduled debt service, that is, in waiting, you can
not yet due. record all operations
except arrears.
Waiting All maturities for which no debt Record a debt service

service operation has been operation: payment,
Scheduled debt
recorded at their scheduled date. arrears, forgiveness,

rescheduling or swap.
service
Suspended A maturity stopped temporarily Delete the suspended

so others can be processed operation: it returns to
sequentially. “waiting” status.
Paid This maturity has been recorded -

as a payment.
Arrear This maturity has been recorded The arrear can be paid,
as an arrear. rescheduled, forgiven or
swapped.
Arrear paid The arrear has been paid. -

Actual debt service
Arrear rescheduled The arrear has been rescheduled. -
Arrear forgiven The arrear has been forgiven. -
Arrear swapped The arrear has been swapped. -
Rescheduled The maturity has been recorded -

as a rescheduling.
Forgiven The maturity has been recorded -

as forgiven.
Swap This maturity has been recorded -

as a swap.
PROCESSING SCHEDULED PAYMENTS

You must process the scheduled payments in a strictly sequential manner. This means that:
• Maturities with a “waiting” status always have priority: you must select the first one
(the oldest) that appears in the list.
• If all maturities have the “scheduled” status, you must select the first one (the oldest),
that appears in the list.
The Payment fund dialog box

This optional dialog box lets you identify the funds used to make a commission payment. It is
used in the context of local government debt where you have linked the loan/debt security
with a fund allocated to its reimbursement. For more information on local government debt,
see Chapter 9 of this guide.
The Arrears dialog box

You can directly record an arrear selecting a maturity with a “waiting” status by clicking the
Arrears link.
You can also record an arrear indirectly when you carry out a partial payment: you confirm
that the difference is to be recorded as an arrear.
The other dialog boxes: Rescheduled, Forgiven, or Swapped

The other dialog boxes are used to record commission maturities (with a status of “waiting”,
“scheduled” or “arrear”) as rescheduling, forgiveness or swap operations.
The fields in these windows are identical.
The Late Interest tab

DMFAS handles late interest differently from commission operations. It does not automati-
cally calculate a schedule for late interest based on the data for a registered loan or debt secu-
rity. Instead, you must record all late interest operations manually. This reflects actual
practice in which late interest is often treated separately and seldom planned in advance. Fur-
thermore, it can be negotiated with the creditor.
THE DI ALOG BOXES IN THIS TAB

The Payments dialog box is used to record payments of late interest.
The Rescheduled dialog box is used to record rescheduling of late interest.
The Forgiveness dialog box is used to record the forgiveness of late interest.
Implementing Capitalized Interest
About
About this
this chapter
chapter
What is capitalized interest?

The data for capitalized interest

The phases for capitalized interest
Recording the terms for capitalized interest
About capitalized interest ..................................................................................................239
What is capitalized interest? .............................................................................................................. 239

Simple and compound interest .......................................................................................................... 239
The data for capitalized interest ......................................................................................................... 239
The formula for calculating capitalized interest .................................................................................. 240
The phases for implementing capitalized interest in DMFAS ................................................................ 240
Recording the terms for capitalized interest ........................................................................241
Specifying a capitalization period ....................................................................................................... 241

Specifying how to handle capitalized interest ...................................................................................... 241
Calculating the capitalized interest schedule ........................................................................243
Checking the schedule ....................................................................................................................... 243
Applying capitalized interest ................................................................................................243
Selecting a capitalized interest schedule ............................................................................................. 243

Applying capitalized interest operations ............................................................................................. 243
The adjustment of the face value ........................................................................................................ 243
The creation of amendments ............................................................................................................. 243
The generation of real drawings ........................................................................................................ 244
Setting up partial capitalization ...........................................................................................244
Recording partial capitalization ........................................................................................................... 244

About capitalized interest
About capitalized interest

DMFAS offers a facility for recording capitalized interest and producing reports showing the
details of the capitalization. This module can be used for both loans and debt securities.
WHAT IS CAPITALIZED INTEREST?

Interest capitalization refers to the inclusion of a loan’s interest into the corpus of the loan.
The capitalization therefore causes the stock of the debt to increase.
Interest is capitalized through the conversion of accrued interest costs or future interest pay-
ments, by a contractual arrangement with the creditor, into a new debt instrument or the
principal amount. The most common form of capitalization is the reinvestment of interest
costs into the principal amount, either because of an explicit agreement regarding the specific
debt instrument or as part of a rescheduling agreement. Frequently as part of a rescheduling
agreement, some percentage of interest due during the consolidation period is converted,
through an agreement made with the creditor, into principal.
SI MPLE AND COMPOUND I NTERES T

The underlying principle of capitalization is based on compound interest.
When only the original capital bears interest, the interest is said to be simple interest. When
the interest payments on the capital as well as the original capital itself bears interest, the
interest is said to be compound interest.
When interest is added to the principal at regular periods and the interest of each succeeding
period is calculated as a certain percentage of this new principal, the total amount accumu-
lated at the end of any period is called the compound amount of the principal. The difference
between the compound amount and the original principal is called the compound interest on
the given principal.
THE DATA FOR CAPITALIZED INTEREST

The implementation of capitalized interest for a loan or bond involves the following data,
described below.
Capitalization period
Interest is capitalized over a period made up of a start date and an end date. This is referred
to as the capitalization period.
Capitalization dates
Capitalization dates are the dates at which the interest amounts are integrated in the out-
standing. There can be one or more capitalization dates. Generally, it occurs on the first
repayment date. All existing rules for interest payment dates apply to the capitalization date.
Frequency of capitalization
Frequency of capitalization means how often interest is capitalized within the capitalization
period. In DMFAS it corresponds to the periodicity code.
Frequency of conversion
Frequency of conversion indicates how often interest is computed. In DMFAS, it corresponds
to the conversion factor.
For example, interest can be capitalized each semester but the interest computed each month.
In this case, the frequency of conversion is monthly.
The frequency of conversion must not be greater than the frequency of capitalization.
THE FORMULA FOR CALCULATING CAPITALIZED INTEREST

The formula for computing capitalized interest is just the usual formula for interest:
I = Ot0* r *d/Y
where
• O is the outstanding
• r is the interest rate as a percentage
• d is the number of days between two capitalization dates
• Y is the number of days in the year (360, 364, 365, 366)
THE PHASES F OR IMPLEMENTING CAPITALIZED INTEREST IN DMFAS

The phases for implementing capitalized interest in DMFAS are shown in the diagram below.
The main phases are as follows:
• Record the terms for the capitalized interest
• Calculate the schedule for capitalized interest
• Apply capitalized interest
• Produce reports
The phases are covered in detail in the remaining sections of this chapter.
The phases for implementing capitalized interest for a loan in DMFAS

Recording the terms for capitalized interest
Recording the terms for capitalized interest

SPECIFYING A CAPITALIZATION PERIOD
You record a capitalization period in the same window where you enter normal interest
terms: in the Interest tab of the Tranches/Series window. For any given tranche you can cre-
ate several capitalization periods and regular payment schedules as long as they do not over-
lap. Note that for the principal terms of loans, you can use only calculation method 70. For
each capitalization period, enter the necessary data and then click the Special Conditions link.
Click the Capitalized? checkbox to specify the capitalization.

Note that modifying the data on capitalized interest may lead to the creation of an amend-
ment. For more information, refer to the section on Interest terms in Chapter 7, “Registering
Loans”.
NOTE
When recording payment schedules, clearly separate those that are capitalized from those
that are not. Otherwise, DMFAS capitalizes all payment schedules.
SPECIFYING HOW TO HANDLE CAPITALIZED INTE REST

DMFAS provides two ways to handle capitalized interest.
In the first case, DMFAS manages capitalized interest in the same tranche. You choose this
way when the new repayment conditions of the principal, which include capitalized interest,
are equal to the repayment conditions of the original principal.
In the second case, DMFAS creates a new tranche for each application of capitalization. You
choose this case when the payment conditions of the capitalized interest are different from
the repayment conditions of the original principal. If you choose this way of handling capital-
ization, you must specify tranche management option 3 (known tranches).
By default, DMFAS applies the first case. However, to apply the second case, click Create New
Tranche? checkbox.
Case 1
For each application of capitalization, DMFAS:
• Creates an amendment while incrementing the face value of the loan/debt security at
the capitalization date
• Increases the amount of the tranche by the amount of the capitalization
• Generates a real drawing at the capitalization date with the mode of execution “capital-
ization”.
Case 2
DMFAS creates a new tranche for each capitalized interest copying the conditions of the orig-
inal tranche except the terms of capitalized interest. For each application of capitalization,
DMFAS:
• Creates an amendment to the amount of the loan/debt security at the capitalization
date
• Creates a new tranche in the loan or a new series in the debt security
• Generates a real drawing at the capitalization date with the mode of execution “capital-
ization”.
For both cases

For both cases, DMFAS displays:
• the list of scheduled capitalized interest in the amortization table
• the updated amounts in the Loans/Debt Securities Information Sheet and in the
Tranches/Series Information Sheet
• the drawings generated by the capitalized interest in the Account Statement
Calculating the capitalized interest schedule
Calculating the capitalized interest schedule

When you save the data in the Interest tab, DMFAS generates the schedule of capitalized
interest in the amortization table. It is an estimation based on the terms you already entered.
CHECK ING THE SCHE DU LE

The next step is to check the schedule generated by DMFAS. It may be necessary to make
minor adjustments. You are free to change any of the calculated amounts as is sometimes the
case with the amortization schedules. When you press the Calculate button, DMFAS recalcu-
lates the amounts using the existing parameters.
Applying capitalized interest

The next phase is to apply the capitalized interest. This means recording real operations for
capitalized interest and modifying them as necessary. DMFAS does not do this automatically
as some amounts may have to be reconciled with those of the creditors; you may therefore
need to adjust these differences before DMFAS can generate the drawings.
The basic process for applying capitalized interest to a loan or debt security is as follows:
1 Select a capitalized interest schedule.
2 Apply the capitalized interest.
- DMFAS updates the amount of the tranche/series.
- DMFAS generates the real drawings.
3 Modify the capitalized interest if necessary.
NOTE
If you selected case 2, it’s at this point, as you apply capitalized interest, that DMFAS creates
a new tranche. It creates a new tranche for each capitalization operation.
SELECTING A CAPITAL IZED INTEREST SCHEDULE

1 From the Portal, select Debt Service and from the left panel Loans (Debt Securities) >
Apply Capitalization of Interest.
2 Select the loan/tranche or debt securities/series in which you wish to work.
Note that DMFAS automatically recalculates subsequent scheduled amounts based on
the new face value of the loan/debt security.
3 Select (or highlight) the desired row and press the Apply button.
The Record dialog box appears.
APPLYING CAPITALIZED INTEREST OPERATIONS

The Apply Capitalization of Interest window lets you review, record or change the data relat-
ing to capitalized interest operations before DMFAS generates the real drawings.
THE ADJ USTMENT OF TH E FACE VALUE

Each time you record capitalized interest operations, DMFAS adjusts the face value of the
loan/debt security in the Agreement Info tab (General Information window) to reflect these
operations. Note that this is so because of the default setting in the Special Conditions dialog
box. In case 1, it also adjusts the amount of the tranche/series.
THE CREATION OF AMENDMENTS

DMFAS also records operations as an amendment to the agreement. To view these amend-
ments, press the Amendment History link from the Agreement Info tab (General Information
window) of the Loans/Debt Securities module.
This window lists each amendment indicating its scheduled date, date of operation and an
amount which is the adjusted face value. You can thus compare the effect each operation has
on the face values against the original value.
THE GENERATI ON OF RE AL DRAWINGS

When you apply capitalized interest, DMFAS automatically generates the real drawings
based on the information you recorded. To view these drawings, first re-calculate the amorti-
zation table.
Depending on the option you chose, the results appear either in the same tranche (option 1)
or in a new tranche (option 2).
You can also view the drawings in the amortization table.
Setting up partial capitalization

DMFAS allows partial capitalization in which only a percentage of the interest due is capital-
ized. This type of capitalization may arise from a reorganization agreement or in certain types
of debt security issues. Partial capitalization is recorded in the Special Conditions dialog box.
EXAMPLE
The following shows an issue of 30-year discount bonds with an annual coupon of 8.28%.
Part of the interest is capitalized while the other part is normal interest.
Interest Paid Capitalized

Year
in Cash Interest
1 to 5 3.97% 4.31%
6 to 10 5.77% 2.51%
11 to 30 8.28% 0.00%
RECORDING PAR TIAL CAPITALIZATION

Start by clicking the Capitalized? checkbox in the Special Conditions dialog box to record a
capitalization to be applied during the payment schedule defined in the Interest tab; this
schedule then becomes the capitalization period.
If one were to stop at this stage, all of the interest would be capitalized. To specify the condi-
tions for a partial capitalization, click the Partial Capitalization link in the Special Conditions
dialog box
In the Partial Capitalization dialog box, you must record one or more sub-periods of partial
capitalization falling within the capitalization period.
PART 8
Reports
246
An Introduction to DMFAS 6 Reports
About
About this
this chapter
chapter
An Introduction to module
DMFAS
About the Reports

What’s new in reports

Summary of the reports available
248 DMFAS 6 Reports
User Documentation Supplement
About this chapter ..............................................................................................................249
About the Reports module ..................................................................................................249
The importance of reports ................................................................................................................. 249

DMFAS libraries ................................................................................................................................ 249
Reports and security ........................................................................................................................... 250
The different tables/views of DMFAS ................................................................................................... 250
What’s new in reports ........................................................................................................251
The new menu structure of the Reports module ................................................................................... 251

Creating reports in other modules ...................................................................................................... 251
A new query tool ................................................................................................................................ 252
New output formats for reports ......................................................................................................... 252
Changes after a Closing Date ............................................................................................................ 253
The tables of aggregates ................................................................................................................... 254
The Sets Calculation menu .............................................................................................................. 254
New reports ...................................................................................................................................... 254
Summary of the reports available in DMFAS .......................................................................255
Standard reports ............................................................................................................................... 255

User-defined reports ......................................................................................................................... 256
Other reports .................................................................................................................................... 256
About this chapter
About this chapter

This chapter introduces fundamental concepts in DMFAS 6 reports. It includes an explanation
of:
• DMFAS libraries
• the new menu structure of the Reports module
• the new features in the Reports module
• a summary of the reports available in DMFAS
About the Reports module

With its Report module, DMFAS 6 can generate a wide range of standard and customized
reports via a new query tool.
These include reports on loans, debt securities, sukuk, grants, on-lent loans, reference files,
general agreements, reorganization agreements, statistical bulletins and World Bank reports.
THE IMPOR T ANCE OF REPOR TS

All the data you record in DMFAS is ultimately aimed at producing reports that are accurate,
complete and compliant with standards. To this end, DMFAS offers extensive features that
simplify your reporting tasks.
DMFAS reports are multi-purpose in that they address three categories of user needs: inter-
nal, external and control.
• Internal: debt officers need to produce reports about debt in the specific formats
required by national authorities and other related users.
• External: debt officers need to produce reports in the specific formats required by inter-
national organizations and that adhere to an international standardization of statistics.
• Control: DMFAS users need to produce reports for the purposes of data validation.
DMFAS L IB RARI ES
DMFAS provides libraries for predefined reports relating to the statistical bulletin and data
validation.
For the predefined reports in such libraries you can change only a few parameters. You
cannot add other reports to them. Nonetheless, you can always copy a standard report to a
user library.
Other named libraries are provided but are empty: you can fill them in with you own user-
defined reports.
When you create your own reports relating to data validation, the debt status or a statistical
bulletin, you can decide to store them in a library. By doing so, you can contribute to building
up the library. What’s more, these reports then become shareable. This means that users at
your site can generate the same report or copy it in order to create a new one. Using the
library results in greater productivity and efficiency.
Note that the Report Security function (which is part of the Security module) may restrict
your rights to save and/or modify reports in the libraries.
250 DMFAS 6 Reports
REPOR TS AND SECURITY

The Security module in DMFAS may affect the report functions to which you have access
rights. For example, depending on your role, you may be restricted to producing only certain
reports. As stated above, you may also be restricted from saving or modifying reports in
libraries.
THE DI FFERENT TABLES/VIEWS OF DMFAS

Data recorded in DMFAS is organized in the database as tables and views such as, for exam-
ple, LOAN_TRANCHES, Participants, Projects, disbursements and debt service operations.
Over 250 tables exist in DMFAS.
What’s new in reports

DMFAS 6 brings the following changes to the Reports module:
• a reorganized structure of the Reports menu
• a new query tool
• new output formats for reports
• a simplified way to store/remove reports from the library
• an option for creating a graphic for data
• tables of aggregates
• a new Sets Calculation menu
• reports on changes made after a closing date
• new reports corresponding to new modules
DMFAS 6 maintains all of the reports existing in DMFAS 5.3 while offering many new ones.
THE NEW ME NU S T RU CTURE OF THE REPOR T S M ODU LE

As with the other functionalities in DMFAS 6, the Reports module has undergone a major
change in design, navigation and organization.
The main access to the Reports module is now through the links in the Portal:
The left panel of the module gives you access to all the main types of reports:
CREATING REPOR TS IN OTHER MODU LES

In modules other than the Reports module, the contextual Tools menu provides access to the
reports relating to the active module.
252 DMFAS 6 Reports
A NEW QUER Y TOOL

A new open source query tool is available for generating reports in DMFAS 6. As a user of
DMFAS 6, you also have the option to use Oracle Query Builder from outside the DMFAS
software.
NEW OUTPUT FORMATS FOR REPOR TS

When you generate a report in any of the formats below, DMFAS 6 displays the results in a
separate window. The formats are as follows:
• PDF - Adobe Portable Document Format, a widely-used format for documents
• HTML - Hyper Text Markup Language, a web document
• XLS - Microsoft Excel format
• DOC - Microsoft Word format
When you generate a report in any of these formats, DMFAS displays the results in a separate
window. Except for HTML, you can save the results on your computer.
NOTE
The choice of formats in DMFAS 6 has been improved to cover more commonly used formats
while eliminating formats that are older or obsolete.
CHANGES AFTER A CLOSING DATE

For a set of instruments, this report lists all the transactions (that is, drawings and debt ser-
vice operations) recorded between a certified closing date and a comparison date; in other
words, the transactions recorded that affect the debt outstanding at a certified closing date.
This report requires that your institution use the new utility on closing dates.
254 DMFAS 6 Reports
THE TABLES OF AGGREGATES

The Tables of Aggregates are a utility that enables DMFAS 6 to generate reports much faster
than before. It increases the performance of the system.
In the tables, you record the aggregates (also called debt totals) and their related parameters
such as start and end date, frequency, exchange rate dates and set names.
DMFAS 6 saves these parameters in tables stored in the database. It calculates the value of the
aggregates based on the parameters and saves the results in the tables.
As a result, you can thereafter generate user-reports much faster than before.
The tables of aggregates continue to store the aggregates for future generation of reports.
They therefore enable the system to avoid performing unnecessary calculations each time a
user generates a report.
THE SETS CALCUL ATION MENU
The User-defined Analytical & Managerial Reports module features a new sub-menu on the
left panel called “Sets Calculation” which covers:
• Projections on Outstanding - In DMFAS, a loan outstanding is the sum of real draw-
ings minus the sum of principal reimbursements.
• Present Value Calculations - The total amount that a series of future payments is
worth now. It is defined as the sum of all future debt service obligations (interest and
principal) on existing debt, discounted at a given interest rate.
• Calculation of Accrued Interest - In DMFAS, accrued interest is the interest that has
accumulated over a period of time and not yet due for payment. It is calculated at a
specified date between two scheduled interest payment dates.
The sub-menu derives its name from the fact that the functions are used to calculate data sets.
These functions were formerly located on the Analysis menu in DMFAS 5.3.
NEW REPOR T S
DMFAS 6 provides reports for all the new modules introduced in the new version:
• Debt Securities
• Sukuk
• Short-term External Debt
• Private Non-guaranteed External Debt
• Analysis (debt ratios, financial indicators, average terms, interest rate/exchange rate
sensitivity)
In addition, DMFAS 6 accepts all queries created with DMFAS 5.3. Indeed 5.3 queries work
with the new Query Tool. Of course, it is still possible to use Oracle Query Builder (as before)
from outside DMFAS 6.
Summary of the reports available in DMFAS
S u m m a r y o f t h e r e p o r t s a v a i l a b l e i n D M FA S
STANDARD RE POR T S
Category Type Reports
Operational Loans - Loan Information Sheet, Tranche Information Sheet,

Loan Account Statement, Amortization Table, Amortization
Table Errors, Changes After a Closing Date
On-lent Loans - Instrument Information Sheet, Tranche

Information Sheet, Instrument Account Statement,
Amortization Table, Amortization Table Errors, Changes After a
Closing Date
Debt Securities - Debt Security Information Sheet, Series

Information Sheet, Debt Security Account Statement,
Amortization Table, Amortization Table Errors, Debt Security
Commissions Table, Debt Security Subscription Summary
Sheet, Changes After a Closing Date
Sukuk - Sukuk Information Sheet, Series Information Sheet,

Amortization Table, Amortization Table Errors, Sukuk
Subscription Summary, Sukuk Fees Table, Sukuk Account
Statement, Changes After a Closing Date
Standard General Agreements - General Information Sheet
Grants - Grant Information Sheet, Changes After a Closing

Date
Reference Files - Participants, Exchange Rates, Funds, Projects
Late Interest Estimate
Analytical & Reorganization - Reorganization Information Sheet,

Managerial Relationship Between New and Reorganized Instruments,
Reorganized Transactions/Arrears
Revolving General Agreements - Report 1, Report 2

256 DMFAS 6 Reports
US ER - DE FINE D R EP O R TS
Operational Data Validation
User-
defined Debt Status
Analytical & Sets Calculation - Projections on Outstanding, Present Value

Managerial Calculations, Calculation of Accrued Interest
Statistical Bulletins
OTHER RE POR T S
Data Validation A set of predefined reports
Statistical Bulletins A set of predefined reports
World Bank Reports Form 1, Form 2

Index
A simple and compound interest 239
specifying how to handle 241
Administration (module category) 34 Changes after a closing date report 253
Agreement info 1 tab 98–99 Characteristics tab (debt securities) 153–154
Agreement info 2 tab 100 Commissions
Amendment history dialog box debt service operations 235–236
for changes in financial conditions 116, 164 processing scheduled payments 236
for debt securities 154 scheduled debt service vs. actual debt service 235
for loans 98 tolerance factor 235
Amortization table tab Commissions (debt securities)
for debt securities 165 calculation methods 168
for loans 119 loan or tranche level commissions 168
Analysis (module category) 36 regular and irregular 168
Annuities 151 Commissions (loans)
Arrears (debt service operation) 234 calculation methods 121
Attachments tab loan or tranche level commissions 121
for debt securities 185 regular and irregular 121
for loans 155 types of 122–123
Commissions window
B for debt securities 167–170
for loans 120–123
Bank accounts 62 Common interest rates 66
bank accounts tab 62 Currency pool loans 91
user info tab and notes tab 62
Bearer securities 143 D
Budget allocations 223–224
Budget lines Data
definition of 67 attaching files 41
when to record 67 deleting 40
Budget period allocations how DMFAS 6 validates 40
definition of 223 recording notes 41
how to use the window 224 saving 40
organization of the window 223 Search facility 42–45
prerequisites of 223 Date formats, Language 48
where to get more information 224 Debt assumption 100
Business day convention dialog box Debt securities
for commissions 123, 168 bearer securities 143
for debt securities 157 classification of 146
for loans 105 commissions window 167–170
Buyback (debt service operation) 234 definition of 143
general information window 153–155
C how issued 144
how represented 143
CABEI 117 interest or coupon? 162
Calculation methods participants 143
commissions (debt securities) 168 registered securities 143
commissions (loans) 121 series window 156–166
principal (debt securities) 160 subscriptions 207–208
principal (loans) 112 syndication 144
Calculator 38 the securities market 145
Capitalized interest 239–244 when and how repaid 160
adjustment of the face value 243 Debt service
creation of amendments 243 definition of 227
data 239 scheduled vs. actual 231
definition of 239 Debt Service (module category) 35
formula for calculating 240 Debt service operations
generation of real drawings 244 arrears 234
phases for implementing 240 buyback 234
recording 241–243 commissions 235–236
258
definition of 227 deleting 110

forgiveness 234 how estimated 106
general recommendations 230 modifying the estimation method 110
late interest 236 roll forward estimated drawings 111
module 227–236 tab 106–111
organization of the window 228 two methods for estimating 106–109
payment 232–234 Euro national currency units 69
payment fund dialog box 234 Exchange arrangements 65
prepayment 234 Exchange rates 63–65
principal and interest 231–234 automatic downloading 64
rescheduling 234 exchange arrangements 65
status 231 how often to enter 64
support for HIPC and MDRI relief 229 how to correct 65
swap 234 methods for entering 63
tolerance factors 232 where to get 65
Direct Search 42 which currencies to enter 64
Disbursements. See Loan drawings or Grant draw- External Debt Statistics
ings. Guide for Compilers and Users 146
Discount rates 68 External vs. domestic debt 100
Discount/premium terms dialog box 158
DMFAS 6 F
Administration 34
advantages of 19–20 Fields 38
Analysis 36 Fixed rate bonds 150, 162
Debt Service 35 Floating rate securities 150, 162
definition of 19 Forgiveness (debt service operation) 234
helpdesk 27 Fund details and usage dialog box 106
how to enter data 39 Funds 70, 137
Mobilization 35
modules on the Portal 34–36 G
Negotiation 34
Portal 31–33 General agreements
reasons for new version 19 definition of 77
Reports 35 how the window is organized 79
scope of 21–25 how to access 77
technical characteristics of 25–26 revolving general agreements 78
User parameters 48 General information window (debt securities) 154
what’s new 21–26 amendment history dialog box 154
working modes 47 characteristics tab 153–154
DMFAS 6 interface 37–48 notes tab 155
attaching files 41 participants tab 154
calculator 38 reopening dialog box 154
deleting data 40 user info tab 155
Edit functions 40 General information window (loans) 98–99
fields 38 agreement info 1 tab 98–99
grid 39 agreement info 2 tab 100
how to enter data 39 amendment history dialog box 98
left panel, windows, tabs 37 associated fund dialog box 99
on-line help 13 attachments tabs 103, 155
Portal 31–33 conditions for effectiveness dialog box 98
recording notes 41 loan information sheet 99
saving data 40 notes tab 103
Search facility 42–45 other classifications tab 103
skins, date formats, language 48 participants tab 103
validation of data 40 revolving terms dialog box 99
Drawing requests 217–218 share trade dialog box 99
status history dialog box 98
E user info tab 103
Grant drawings
Economic Sector 101 definition of 211
Edit functions 40 effect in DMFAS 212
Estimated drawings (loans) how DMFAS calculates and checks amounts 213
adding or modifying 110 how to check amounts 213
definition of 106 module 211–213
organization of window 211, 218
259
prerequisites of 212 L
types in DMFAS 211
Grants Late interest 236
definition of 185 Left panel 37
module 185–186 Loan drawings
organization of windows 185–186 creating a tranche 199
Grid (data entry) 39 definition of 198
effect in DMFAS 199
H estimated drawings 106–111
how DMFAS calculates and checks amounts 200
Handbook on Securities Statistics 146 how to check amounts 200–203
Helpdesk 27 module 197–204
Historical commission 53 organization of window 197
Historical data and operations 51–56 prerequisites of 199
definition of 51 roll forward estimated drawings 204
how to record 51 where to get information on 203
Historical debt service Loans
historical balances and the cut-off date 53 currency pool loans 91
how to access 53 definition of 85
how to record 54 economic sector 101
using the window 56 instrument classification 102
Historical drawings purpose and purpose details 101
detailed or aggregated data? 52 syndicated loans 92–93
where to record 52 Loans module 97–122
Historical exchange rates 70 about 97
Hybrid sukuk 177 general information window 98–103, 153–155
how to access 97
I organization of windows 97
Local government debt 135–138
Ijara sukuk 176
background of 135
Indexation conditions dialog box 156
definition of 135
Indexed securities 162
recording 137–138
Indexes 71
Instrument classification 102 M
Interest
capitalized interest 239 Maturity groups 68
simple and compound 239 Mobilization (module category) 35
Interest (debt securities) Modules
fixed rate bonds 162 accessing from the Portal 33
floating fates 163 descriptions of 34–36
floating rate securities 162 Mudabarah sukuk 176
indexed securities 162 Murabaha sukuk 177
interest of coupon? 162 Musharakah sukuk 177
regular and irregular schedules 163
variable interest rates 163 N
Interest (loans)
floating rates 115 Negotiation (module category) 34
other penalty rates dialog box 116 Notes tab
payment schedule calculator (interest) 115 for debt securities 155
regular and irregular schedules 115 for loans 103
special conditions dialog box 115
tranche management 2 114 O
updating the amortization table 114
variable interest rates 115 On-lending. See On-lent loans.
Interest rate groups 69 On-lent loans
Interest tab debt classification of 191
for debt securities 162–163 definition of 189
for loans 114–116 how to use the windows 191
Istinisna sukuk 176 mechanism of 190
260
module 189–191 funds 70, 137

terms of 190 historical exchange rates 70
On-line help 13 how to access 59
Other classifications tab 103 importance of 59
Other penalty rates dialog box 116 indexes 71
interest rate groups 69
P maturity groups 68
participant 60–61
Participant reference file 60–61 projects 71
basic info tab 60 Reference for DSM+ dialog box
contact information tab 61 for debt securities 156
how the window is organized 60 for loans 106
user info tab 61 Registered securities 143
Participants tab Reopening dialog box 154
for debt securities 154, 157 Reports
for loans 103 changes after a closing date 253
Payment (debt service operation) 232–234 importance of 249
Payment schedule calculator (interest) new report formats 252
for debt securities 164 what’s new in 251–254
for loans 115 Reports (module category) 35
Payment schedule calculator (principal) Reports module
for debt securities 161 about 249–250
for loans 113 libraries 249
Payments. See debt service payments new report formats 252
Perpetual bonds 151 new report types 254
Portal 31–33 query tool 252
accessing modules 33 reorganization of 251
definition of 31 sets calculation menu 254
different areas explained 31–32 summary of reports 255
logging in to 33 tables of aggregates 254
Prepayment (debt service operation) 234 what’s new in 251–254
Pricing tab 166 Rescheduling (debt service operation) 234
Principal and Interest tab 231–234 Revolving credit
Principal repayments (debt securities) conditions of 129
calculation methods 160 definition of 127
regular and irregular schedules 160 example of 131–132
Principal repayments (loans) revolving general agreement vs.
calculation methods 112 revolving credit 127
regular and irregular schedules 112 setting up for a loan 128–130
updating the amortization table 111 Revolving general agreements 78
Principal tab Roll forward estimated drawings 111, 204
for debt securities 160
for loans 111–113 S
Projects 71
Projects allocation dialog box 105 Salam sukuk 175
Purpose and Purpose Details 101 Scheduled (status) 231, 236
Search facility 42–45
Q Securities market 145
Series info tab 156–158
Query tool 252 Series window 156–166
amortization table tab 165
R business day convention dialog box 157
discount/premium terms dialog box 158
Real drawings indexation conditions dialog box 156
grants 211 interest tab 162–163
loans 198 participants tab 157
Real subscriptions dialog box 158 payment schedule calculator (interest) 164
Reference files payment schedule calculator (principal) 161
bank accounts 62 pricing tab 166
budget lines 67 principal tab 160
common interest rates 66 reference for DSM+ dialog box 156
definition of 59 series info tab 156–158
discount rates 68
euro national currency units 69
exchange rates 63–65
261
special conditions dialog box 164 Tranches window

subscription tab 158 business day convention dialog box 105
user info tab 159 estimated drawings tab 106–111
Sets Calculation menu 254 fund details and usage dialog box 106
Skins 48 interest tab 114–116
Special conditions dialog box payment schedule calculator (principal) 113
for debt securities 164 principal tab 111–113
for loans 115 projects allocation dialog box 105
Standard reports 255 Reference for DSM+ dialog box 106
Status (for debt service operations) 231 tranche participants dialog box 105
Status history dialog box tranches info tab 105
for debt securities 154
Stepped bonds 150 U
Subscriptions
definition of 207 User info tab
effect in DMFAS 207 for debt securities 155, 159
how DMFAS calculates and checks amounts 208 for loans 103
module 207–208 User parameters 48
prerequisites of 208 User-defined reports 255
real subscriptions dialog box 158
tab 158 V
types in DMFAS 207
Sukuk Variable interest rates 115
definition of 175
hybrid 177 W
Ijara sukuk 176
Waiting (status) 231, 236
Istisna’a sukuk 176
Windows 37
Mudabarah sukuk 176
Working modes in DMFAS 6 47
Murabaha sukuk 177
Musharakah sukuk 177
Z
Salam sukuk 175
Sukuk module Zero-coupon bonds 150, 162
category of instruments 178
structure of 178
Suspension (debt service operations) 228
Swap (debt service operation) 234
Syndicated loans 92–93
Syndication (debt securities) 144
T
Tables of Aggregates 254
Tabs 37
Tolerance factors 232
Tranche participants dialog box 105
Tranches
about 104
action to be taken 104
choosing between options 2 or 3 89
definition of 85
guidelines 90
known tranches 89
one tranche 85–86
option 2 89
option 3 90
options for managing tranches 85–90
unknown tranches 87–88
where to get information on 104
Tranches info tab 105

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DMFAS

DMFAS 66User's Guide

This is not an official UNCTAD document.

All rights reserved.

PART 1 GETTING STARTED 15

Chapter 1 An Introduction to DMFAS 6 17

About DMFAS .......................................................................................................................19

Chapter 2 The Basics of DMFAS 29

Chapter 3 Recording Historical Data and Operations 49

About Historical Data and Operations ...................................................................................51

Chapter 4 Recording and Maintaining Reference Files 57

About Reference Files ...........................................................................................................59

Euro National Currency Units ................................................................................................69

PART 2 REGISTERING FRAME AGREEMENTS 73

Chapter 5 Registering General Agreements 75

About the General Agreements module ................................................................................77

PART 3 REGISTERING LOANS 81

Chapter 6 An Introduction to Loans 83

The concept of loans and tranches ........................................................................................85

Chapter 7 Registering Loan Agreements 95

About the Loans module .....................................................................................................97

The Interest tab ................................................................................................................................. 114

Chapter 8 Registering Revolving Credit 125

About revolving credit .........................................................................................................127

Chapter 9 Registering Local Government Debt Instruments 133

About local government debt .............................................................................................135

PART 4 REGISTERING DEBT SECURITIES 139

Chapter 10 An Introduction to Debt Securities 141

About Debt Securities .........................................................................................................143

Chapter 11 Registering Debt Securities 147

About the Debt Securities module ....................................................................................... 149

PART 5 REGISTERING ISLAMIC SECURITIES 171

Chapter 12 Registering Sukuk 173

About Sukuk .......................................................................................................................175

PART 6 REGISTERING NON-DEBT AGREEMENTS 181

Chapter 13 Registering Grants 183

About the Grants module ...................................................................................................185

Chapter 14 Registering On-lent Loans 187

About the On-lent Loans module .......................................................................................189

PART 7 MOBILIZING FUNDS 193

Chapter 15 Recording Real Drawings on Loans 195

About the Loan Drawings module ......................................................................................197

Chapter 16 Recording Debt Security Subscriptions 205

About real subscriptions ......................................................................................................207

Chapter 17 Recording Real Drawings on Grants 209

About the Grant Real Drawings module .............................................................................211

How DMFAS calculates and checks amounts ......................................................................213

Chapter 18 Recording Drawing Requests 215

About Drawing Requests ....................................................................................................217

PART 8 DEBT SERVICE 219

Chapter 19 Recording Budget Allocations 221

About budget allocations ....................................................................................................223

Chapter 20 Recording Debt Service Operations 225

About the Debt Service Operations module ........................................................................227

Chapter 21 Implementing Capitalized Interest 237

About capitalized interest ..................................................................................................239

Calculating the capitalized interest schedule ........................................................................243

PART 9 REPORTS 245

Chapter 22 An Introduction to DMFAS 6 Reports 247

About this chapter ..............................................................................................................249

Overview of this guide ..........................................................................................................11

Contents of this guide .......................................................................................................................... 11

Intended audience ................................................................................................................12