4.27.1 Processing Sell Participation
The following example illustrates how sell participation deals are handled in SLT.
Example
Let us assume a tranche contract of $1bn. Let there be a drawdown of 200mn.
Let the participant contributions for the tranche and drawdown be as follows:
| Participant | Participant % | Tranche Amount | Drawdown Amount |
|---|---|---|---|
| Desk1 | 20% | 200mn | 400T |
| Desk2 | 30% | 300mn | 600T |
| External Participant | 50% | 500mn | 1mn |
Assume that bank makes sell deals to three silent participants as shown below.
This silent sell deals get reflected in the LB module as follows:
Assuming that bank is the agent, the counterparties SP1, SP2, and SP3 are added
as participants in the contract with Silent Participant tags.
Settlements from the agent to the silent participants are handled in the same way as
handling normal participants.
| Participant | Participation % | Tranche Amount | Drawdown Amount |
|---|---|---|---|
| Desk1 | 8% | 80mn | 160T |
| SP1 | 8% | 80mn | 160T |
| SP2 | 4% | 40mn | 80T |
| Desk2 | 24% | 240mn | 480T |
| SP3 | 6% | 60mn | 120T |
| External Participant | 50% | 500mn | 1mn |
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