Question
If a facility agreement includes a condition that causes a committed revolving facility to become non‑revolving during a period of stress for the credit institution, should the net liquidity outflow for LCR purposes then be calculated based on the maturity date of each individual drawing rather than the overall facility maturity date?
Background on the question
In committed revolving facility agreements, certain provisions are included that restrict outflows for the credit institution during periods of stress. In effect, the facility becomes non‑revolving under such stressed conditions. This implies that, during a stress event, the credit institution is not obliged to accept new drawdowns or rollover requests, and that contractual inflows occur based on the maturity dates of the individual drawings rather than the overall facility maturity. Consequently, under stressed conditions, there is no contractual option for prolongation as discussed in EBA Q&A 2017_3266. 2017_3266 Treatment of inflows from credit facilities in LCR | European Banking Authority
Answer
This question has been rejected because the issue it deals with is already explained or addressed in the LCR DR together withQ&A 3266, which is sufficiently clear and unambiguous.