Treatment of credit limit denominated in a currency other than the currency of the instrument

• Question ID: 2018/0017
• Date of publication: 24/01/2018
• Subject matter: Credit cross-limit structures and multi-debtor/product structures, Off-balance-sheet exposures, Loans price and other conditions
• AnaCredit Manual: Part II
• Data attribute: Off-balance sheet amount, Currency, Outstanding nominal amount

Question

Can a credit limit be reported to AnaCredit if that limit is denominated in a currency other than the currency of the instrument? This is especially relevant where limits are agreed at a higher level and relate to a number of different instruments.

Answer

As a general rule, AnaCredit does not gather information on credit limits per se, but requires that an off-balance-sheet amount be reported if additional funds can be drawn by the debtor vis-à-vis the instrument. To this end, reporting agents report available funds (if any exist) vis-à-vis the instrument as off-balance-sheet amounts (including by means of allocation where relevant). For more information concerning the reporting of instruments comprising off-balance-sheet amounts, please refer to Section 4.6.3 of Part I and Section 3 of Part III of the AnaCredit Manual, which also specify the constraints to be borne in mind in this regard.

Irrespective of whether the instrument and the higher-level credit limit are denominated in the same currency, it is always possible to determine whether, and to what extent, the debtor is able to draw any additional funds vis-à-vis the instrument on the reporting reference date. In the context of AnaCredit, the off-balance-sheet amount reflects the extent to which additional funds can be drawn.

In the context of AnaCredit, all amounts are always reported in euro (following a currency conversion where relevant). Consequently, off-balance-sheet amounts – allocated where relevant – should be reported in euro, even in cases where a credit limit exists at a higher level and relates to a number of different instruments, and regardless of the currency in which those instruments are denominated.

Related questions

See also Off-balance-sheet items in the scope of AnaCredit, Commitment amount at inception and off-balance-sheet amount for cross-limits, Multi-product credit facilities with no specific credit sub-limits, Allocating off-balance-sheet amounts to instruments that do not comprise an undrawn amount