- A charge to the borrower at loan
inception to cover the direct and indirect costs of operating and
managing the DCAT loan program.
Rate – The interest rate necessary to amortize the
interest due at maturity and Add-on over the life of the
– A letter from
CFSC to DCAT and a borrower agreeing to purchase any loan(s) to the
borrower which is in default, up to the Approved Amount.
Amount – The maximum amount of loans to a borrower
which CFSC is obligated to purchase under the Dealer Loan Purchase
Agreement. The sum of the Face Amounts of all outstanding DCAT loans
to a borrower cannot exceed the Approved Amount.
Point(s) - A basis point (“bps”) is 0.01 percentage
Financial Services Corporation (“CFSC” or “CAT Finance”)
Delaware corporation which is a subsidiary of Caterpillar Inc. and
is headquartered in Nashville, Tennessee. CFSC provides Credit
Enhancement and liquidity support for the DCAT CP
Enhancement - When repayment of a
debt (or recovery of the lender’s principal and interest) has been
assured by a third party.
("CP") - a short-term
unsecured debt of a borrower with a maximum maturity of 270 days.
Loan Purchase Agreement
The agreement between DCAT and CFSC pursuant to which CFSC is
obligated to purchase any defaulted loan from DCAT, subject to the
Approved Amount set forth in the Approval
Amount– The total dollar amount of principal and
interest due at the maturity date of CP or a loan. CP and loans are
funded on a discount basis, with a single payment of the Face Amount
due on the maturity date.
Annual distribution to CATD borrowers of the net earnings of CATD
from any credit facility fees paid by CATD members and loans made by
CATD. The distribution is based on the borrowers’ relative CATD loan
patronage and Ambac bonded amounts during the fiscal year. DCAT is
not a cooperative and does not pay patronage dividends.
process of issuing new CP to repay maturing
Fees - Fees
paid by DCAT to CFSC under the terms of the Dealer Loan Purchase
Agreement. Standby fees are based on outstanding CP.