Master Commitment Overview

Learn what master commitments are and how they work

Overview

A master commitment is the finalized credit facility agreement that defines thecomplete facility structure. It's automatically created when a term sheet is approvedby the facility agent. The facility agent then configures lenders, facility rules, andother parameters before submitting for lender approval. Once any lender approves,the facility becomes active.

What Master Commitments Are

A master commitment is the complete agreement that defines how a credit facilitywill operate. It contains all the terms, rules, lender configurations, and parametersthat govern facility operations.

Master commitments are automatically created from approved term sheets—youcannot create them manually. They start in Draft status with information pre-populated from the term sheet. The facility agent then configures the completestructure including lender groups, facility rules, and parameters.

Purpose and Use Cases

For Facility Structure - Master commitments define the complete facility structure,including all rules, parameters, and configurations.

For Lender Configuration - Facility agents add lenders, set commitment amounts,and configure participation percentages.

For Sub-Facility Management - For multiple-lender arrangements, facility agentscan create sub-master commitments with different lender groups.

For Facility Activation - Master commitments must be approved by lenders beforefacilities become active and borrowers can raise funding requests.

Key Components

Facility Terms - Basic facility information from the approved term sheet: maximumfacility amount, interest rates, advance rate, maturity date. This information is pre-populated and read-only.

Lender Groups - Configuration of lenders participating in the facility, including:

      • Lender organization

      • Commitment amount

      • Voting percentage

      • Individual approval tracking

Sub-Facilities - For multiple-branch master commitments:

      • Main facility with all selected lenders

      • Sub-facilities assigned to specific lender groups

      • No two sub-facilities can have the same lenders

Deal Modelling - After activation, the facility agent sets up deal modelling toconfigure calculations and parameters needed before funding requests can be created.

How Master Commitments Work

1. Automatic Creation

When a term sheet is approved by the facility agent, a master commitment isautomatically created with Draft status. It appears as a dropdown under theapproved term sheet in the facility agent's Credit Facility dashboard.

2. Facility Agent Configuration

The facility agent clicks Create Facility to open a comprehensive configuration popup with multiple sections:

      • Basic : Select single or multiple branch facility

      • Parties & Accounts : Add lenders and their commitment amounts

      • Economic & Fees : Configure interest rates and fee structures

      • Additional Sections : Complete all required configurations

      • Review & Create : Final review and submission

                                                                  Create Master Commitment Facility

All data is auto-saved as the facility agent enters it.

3. Sub-Facility Creation (Multiple Branch)

If multiple branch is selected, the facility agent can create sub-facilities:

      • Click Create Sub-Facility in the Review & Create section

      • A new sub-master commitment is created

      • Use the dropdown at the top to switch between main and sub-facilities

      • Assign lenders from the main facility to each sub-facility

      • No two sub-facilities can have the same lenders

4. Submission for Lender Approval

Click Create Facility to finalize. Status changes from Draft to PendingLenderApproval . The facility is shared with selected lenders in their Opportunities section.

5. Lender Approval

Lenders see the facility in their Opportunities section with Review & Approve action. They review the facility details and click Approve & E-Sign to sign via AdobeSign.

                                                                  Lender Approval - Master Commitment

After any one lender approves and signs, the master commitment status changes to Active

6. Deal Modelling

After activation, the facility agent completes deal modelling:

      • Navigate to Active Facilities tab

      • Click Set Up Deal

      • Complete all sections in the deal modelling screen

      • Click Create in the Review section

      • Facility Setup Status changes to Completed 

7. Operational Use

After deal modelling is complete:

      • Borrower can map NFT-minted loans to the facility

      • Borrower can create funding requests

      • Funding workflow proceeds

Important Points to Know

Auto-Created Only - Master commitments are automatically created when termsheets are approved. You cannot create them manually.

Pre-Populated Data - Term sheet data is pre-populated into the mastercommitment and is read-only.

FA Configuration Required - The facility agent must complete all configurationbefore submitting for lender approval.

Sub-Facility Rules - For multiple-branch facilities:

      • Sub-facilities can only include lenders from the main facility

      • No two sub-facilities can have the same lenders

Any Lender Activates - Once any one lender approves, the master commitmentbecomes Active.

Deal Modelling Required - After activation, deal modelling must be completedbefore borrowers can raise funding requests.

No Edit After Active - Once Active, the master commitment cannot be edited.

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