Configure counterparty credits

The following section provides step-by-step instructions for configuring and managing counterparty credit in the application. Configuring counterparty credit involves setting up processes and systems to assess, monitor, and manage the credit risk associated with counterparties.

Here you can learn:

• How to navigate to the Counterparty credit screen.
• How to configure credit limits and manage related settings.
• Analyze credit exposure data based on deals, pricing, and index values and MTM (Mark-to-Market).

The guide simplifies the configuration process, clarifies credit metrics, and ensures effective credit risk monitoring.

Prerequisites

• You must have the requisite add or modify permissions in the Counterparty credit screen.
• A counterparty must be configured prior to setting up counterparty credits.

Configuration steps

Step 1: Navigate to the Counterparty credit screen

1. Log in to the nGenue application.
2. Click the Search icon and enter counterparty credit in the search bar.

3. Double-click Counterparty credit to open the respective screen. Here, you can configure the credit limit for the selected counterparty and view the credit exposure details, which are retrieved from the deal management configuration settings.

4. The next screen i.e., Counterparty credit screen is divided into two tabs: Credit details and Credit exposure.

Credit details

The Credit details tabs further consists of 3 filters to narrow down the results. This provides the flexibility to view only relevant data, making the search process faster and more efficient.

• Value: This filter is used to sort or refine the credit limit amounts for all pre-configured credit limits.
• Limit: This filter is used to sort or refine the limit type for all pre-configured credit limits.
• Counterparty: This dropdown allows you to choose the counterparty for whom they wish to set the credit limit. Based on the selection, the counterparty details will get displayed such as counterparty name, total limit, limit name and the amount. This data is the already configured credit Limit for the counterparty.

For any credit limit added to a counterparty, it will get reflected in the bottom section of the Counterparty credit screen. You can also create a new credit limit or edit/delete the ones that are not required.

Add a new credit limit

1. To add a new credit limit, you must first select the desired counterparty from the Counterparty dropdown.

2. Click on Add new limit icon, which will prompt the system to create a new row with the selected counterparty. You will now require to fill in the following details:

   1. Limit name: Select from the dropdown.
   2. Amount: Credit limit to be added.
   3. Start and end date: Set start and the end date.
   4. Note: Add additional notes if required.

3. After entering all the required details, click the Save button to save the credit limit configured for the counterparty.

Credit exposure

The Credit exposure tab provides a detailed snapshot of a company's credit risk for each counterparty based on configured deals. It allows users to view how much of the credit limit has been used, the outstanding amounts, and potential exposure based on real-time deal data.

Note

The credit exposure data will only be displayed when you click on the the Load button in the Counterparty credit > Credit exposure tab if the counterparty has a configured deal.

To use this tab effectively:

1. Select the desired date from the EOD dropdown to view exposure data for that specific date.
2. If you want to include credit exposure from unconfigured limits, enable the Show unconfigured limit checkbox.
3. Click the Load button. The system fetches and displays data for all counterparties that have associated configured deals.

The data shown is dynamically calculated using the following sources:

1. physical pricing information for the deal,
2. associated index and curve values, and
3. the mark-to-market (MTM) setup.

User scenario

A risk analyst wants to review the credit exposure of a counterparty named "GasCorp Ltd" as of May 1^st.

1. The analyst navigates to the Credit exposure tab under counterparty credit.
2. From the EOD dropdown, the analyst selects May 1^st.
3. They enable the Show unconfigured limit checkbox to include all available exposure data.
4. Upon clicking the Load button, the table populates with credit details for "GasCorp Ltd."
5. The analyst sees that "GasCorp Ltd" has a total limit of $1,000,000, with $700,000 already used. This results in 70% utilization.
6. The delivered not invoiced column shows $50,000, highlighting that invoicing is pending for some deliveries.
7. The analyst notes the MTM value and the specific deal and instrument involved, then flags this counterparty for follow-up to ensure timely invoicing and avoid breaching the credit limit.

Credit exposure- field description table

The main section of the screen contains a table displaying key credit-related metrics for the selected counterparty. The columns in the table include:

Fields	Description	Data type	Mandatory (Y/N)	Fetched from (UI screen)	Displayed on (UI screen)
Counterparty	Displays the name of the counterparty.	String	Y	Counterparty screen	Customer invoice
Total limit	Shows the total credit limit assigned to the counterparty.	Currency	Y	Counterparty > Risk limits tab	Credit limit screen
Usage	Indicates the amount of the credit limit currently utilized.	Currency	Y	Deal management screen	Customer invoice
% utilized	Reflects the percentage of the total limit that has been used.	Percentage	Y	Deal management screen	Customer invoice
Total exposure	Represents the total credit exposure for the counterparty.	Currency	Y	Deal management screen	Customer invoice
Outstanding	Displays the outstanding amounts owed by the counterparty.	Decimal	Y	Deal management screen	Customer invoice
Delivered not invoiced	Represents the value of goods or services delivered but not yet invoiced.	Currency	Y	Deal management screen	N/A
MTM (mark-to-market)	Shows the mark-to-market valuation of open positions for the counterparty.	Currency	N	Market-To-Market screen	N/A
Deal number	Provides a reference number for specific deals associated with the counterparty.	Integer	Y	Auto-generated	Customer invoice
Instrument name	Identifies the type of instrument (e.g., Physical NG) linked to the credit exposure.	String	Y	Deal management	Customer invoice

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