Covenants Anchored Values

Overview

Anchored values are baseline metrics captured at loan origination that serve as reference points for covenant monitoring throughout the loan lifecycle. This guide covers how anchored values are created, viewed, and managed during the origination process.

Navigation: Loan → Anchored Values tab

What Are Anchored Values?

Anchored values capture the state of key metrics at the moment a loan is created. They enable:

• Relative Performance Tracking: Compare current values to origination baseline

• Change Monitoring: Track how metrics change over time

• Trend Analysis: Identify patterns in borrower performance

• Historical Comparison: Reference original conditions for decision-making

Automatic Capture at Loan Creation

When Anchored Values Are Captured

Anchored values are automatically saved when:

1. A loan is created (funded/disbursed)

2. The loan's additive is linked to a covenant

3. The covenant has "Metric for Anchored Value" configured

4. The metric can be calculated for the borrower

What Gets Captured

The system captures:

• Metric value at moment of loan creation

• Timestamp of capture

• Associated covenant information

• Borrower/participant reference

Example

Covenant: DSCR Compliance Metric for Anchored Value: Debt Service Coverage Ratio At Loan Creation:

• System calculates borrower's DSCR = 1.45

• Value 1.45 is saved as anchored value

• Available for comparison during loan servicing

Viewing Anchored Values

On the Loan Record

1. Navigate to the loan record

2. Access the Anchored Values tab

3. View all captured baseline values

Displayed information:

• Metric name

• Anchored value

• Capture date

• Associated covenant

During Origination

After loan creation/funding:

1. Open the newly created loan

2. Navigate to Anchored Values tab

3. Verify all expected values were captured

4. Note any missing values for investigation

Managing Anchored Values

Recalculate Anchored Metric

Purpose: Recalculate anchored value when original calculation had errors

Use cases:

• Participant data was incorrect at time of capture

• Metric calculation script had errors

• Mapping script had errors

Steps:

1. Navigate to the loan's Anchored Values tab

2. Find the anchored value to recalculate

3. Execute Recalculate action

4. System recalculates metric with current data

5. New value replaces previous anchored value

Update Anchored Metric

Purpose: Manually set anchored value when you have verified correct data

Use cases:

• External verification provides accurate value

• System calculation cannot be corrected

• Override needed for specific business reasons

Steps:

1. Navigate to the loan's Anchored Values tab

2. Find the anchored value to update

3. Execute Update action

4. Enter new value

5. Save changes

Note: Manual updates create audit trail entries.

Common Anchored Value Scenarios

Financial Metrics

Metric	Example Value	Monitoring Purpose
Debt-to-Income Ratio	35%	Track changes in borrower obligations
Debt Service Coverage Ratio	1.45	Monitor ability to service debt

Collateral Metrics

Metric	Example Value	Monitoring Purpose
Loan-to-Value Ratio	75%	Track property value changes
Collateral Value	$500,000	Monitor appreciation/depreciation

Use in Covenant Monitoring

During covenant execution, the system compares:

Value Type	Description
Current Value	Real-time calculated metric
Anchored Value	Baseline from origination
Change Percentage	Difference between current and anchored

Troubleshooting

Anchored Value Not Captured

Possible causes:

• Additive not linked to covenant

• "Metric for Anchored Value" field not configured on covenant

• Metric calculation failed at loan creation

• Data not available at time of capture

• Error in metric script or mapping script

Resolution:

• Verify additive is linked to covenant

• Check covenant configuration for anchored metric field

• Review metric and mapping calculation logs

• Contact administrator if data was unavailable

Incorrect Anchored Value

Possible causes:

• Data quality issues at origination

• Metric calculation error

• Mapping script error

• External data source issues

Resolution:

• Review metric calculation method

• Check data sources at time of capture

• Use Recalculate or Update action to correct value

Missing Anchored Values Tab

Possible causes:

• Additive not linked to any covenants

• Covenants don't have anchored metrics configured

• User permissions restricting access

Resolution:

• Verify covenant has additive linked

• Check covenant anchored value configuration

• Verify user role permissions

Best Practices

During Origination

• Verify all expected anchored values are captured

• Review values for reasonableness

• Note any data quality concerns

• Document unusual baseline conditions

Data Quality

• Ensure data sources are current at loan creation

• Verify external data is refreshed before funding

• Review metric calculations for accuracy

• Flag questionable values for review

Related Configuration

• Covenants Setup - Configuring covenants and anchored value metrics

Related Topics

• Covenant Monitoring - Using anchored values during servicing

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For additional support, consult your supervisor or system administrator.