Instruction No. 031-11-2016 on the Accounting of Syndicated Operations

The Governor of the Central Bank of West African States (BCEAO), Having regard to the Treaty of the West African Monetary Union (WAMU) dated January 20, 2007, particularly Article 34; Having regard to the Statutes of the Central Bank of West African States (BCEAO), annexed to the WAMU Treaty dated January 20, 2007, particularly Articles 30, 31, 32, 33 and 34; Having regard to the Uniform Act on Banking Regulation, particularly Articles 50, 51, 52, 53 and 54; Having regard to Decision No. 357-11-2016 of November 15, 2016 establishing the Revised WAMU Bank Accounting Plan and its related annex, particularly Articles 75, 78 and 99, HAS DECIDED:

Chapter 1: General Provisions
Article 1
Pursuant to the provisions of the Revised WAMU Bank Accounting Plan, banks and financial institutions with a banking character, hereinafter referred to as "subject institutions", account for syndicated operations under the conditions set forth in this Instruction.

Article 2
A syndicated operation is a loan or off-balance sheet commitment granted jointly to the same beneficiary by several subject institutions.
A syndicated loan is a direct facility granted jointly to the same beneficiary by several institutions that share its cash flow, risk and proceeds.

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INSTRUCTION NO. 031-11-2016 ON THE ACCOUNTING OF SYNDICATED OPERATIONS The Governor

A syndicated commitment is a financing or guarantee commitment granted jointly to the same beneficiary by several institutions that share its risk and proceeds.

Chapter 2: Rules on Accounting
Article 3
When several subject institutions associate to grant a syndicated loan, each of them, whether acting as lead bank, participant or sub-participant, records its funded share either among claims on credit institutions or among claims on customers, depending on the borrower's status. The lead bank must additionally track off-balance sheet each participant's share. The total amount of the loan disbursed to the beneficiary is recorded as a debit in the account named "Syndicated Loans" by the credit of the accounts named "Lead Bank Share and Co-Participants' Shares".

Article 4
Where an institution's risk share exceeds its funding share, the institution records the resulting surplus off-balance sheet among given guarantee commitments.

Article 5
Where an institution's risk share is lower than its funding share, the institution records the resulting difference off-balance sheet among received guarantee commitments.

Article 6
When several subject institutions associate to grant a syndicated commitment to a third party, each of them, whether acting as lead bank, participant or sub-participant, records its final risk share off-balance sheet. The lead bank must additionally track off-balance sheet each participant's share. The total amount of the commitments to the beneficiary is recorded in syndicated commitment accounts named "Accounts for Given Syndicated Financing Commitments" and "Accounts for Given Syndicated Guarantee Commitments", as applicable. These given syndicated commitment accounts are debited by the credit of the "Lead Bank Share and Co-Participants' Shares" accounts.

Article 7
Fund calls by the lead bank are recorded in temporary accounts as a debit to the "Fund Calls on Syndicated Loans" account and as a credit to the "Counterparties of Fund Calls on Syndicated Loans" account. This entry is reversed upon the release of the participants' shares. Where a participant benefits from an advance funding by the lead bank, this facility appears on the latter's balance sheet in the "Term Loans" account. Concurrently, a participant receiving advance funding from the lead bank records the amount of this advance in the "Term Borrowings" account.

Chapter 3: Final Provisions
Article 8
This Instruction repeals and replaces all prior provisions dealing with the same subject matter.
It enters into force on January 1, 2018 and shall be published where necessary.

Done in Dakar, on November 15, 2016
Tiémoko Meyliet KONE