⏳Fixed Term Vault Mechanics
Learn more about the lending lifecycle and the event timeline for the Fixed Term Vaults.
Loan Cycles
Fixed Term Loan Vaults conduct thirteen (13) 4-week fixed term loans ("loan cycles"). All loans are secured with eligible collateral as specified in the Master Lending Agreement and Loan Confirmation(s). Eligible collateral for Fixed Term USD Vaults is currently limited exclusively to short-dated US Treasury Bills, USD, and USDC.
Each Loan Cycle has a start date (Loan Commencement Date, T=0) and an end date (the Loan Maturity Date, T=28). There are a number of important date/times and events that occur over the lifecycle of a loan, which are described below.
Weekly Maturity Ladder
Four Fixed Term USD Vaults will be launched with concurrent Loan Cycles that are staggered by one week, creating a maturity ladder such each week a loan is commencing and another is maturing. This will provide Lenders with flexibility to allocate capital according to their liquidity needs.
Investment Window & Settlement Date
USDC must be transferred into the Fixed Term USD Vault during the Investment Window, which closes two (2) calendar days before the Loan Commencement Date. The day and time when the Investment Window closes is known as the Settlement Date. USDC must be transferred on or before the Settlement Date to be included in the loan cycle.
Any USDC transferred into a Vault after the Investment Window closes will not be drawn into a Loan until the start of the next Loan Cycle.
Transfer In Window
After the close of the Investment Window, there is a Transfer In Window that runs for 2 business days. The Transfer In Window accounts for the time required to redeem USDC for USD, purchase the loan collateral, and settle the loan collateral in the Borrower's custody account(s).
At the close of the Transfer In Window, the Borrower will have acquired the loan collateral and the loan will commence.
Loan Commencement and Confirmation
On the Loan Commencement Date, each Lender will be issued a Loan Confirmation via email that will document the legally binding terms of the loan. The Loan Commencement Date is the same day as the Loan Maturity Date for the prior Loan Cycle.
For more information on Loan Confirmations, please see the Loan Confirmation page.
Interest and fees start accruing on the Loan Commencement Date and stop accruing the day before the Loan Maturity Date.
Loan Maturity Date & Roll Date
Loans that have not been subject, in part or in whole, to an early withdrawal request or rollover termination notice will automatically compound and be rolled into a new loan which commences on the Roll Date, also known as the Loan Commencement Date, which coincides with the Loan Maturity Date for the previous Loan Cycle.
Withdrawal Requests
There are two types of withdrawal requests in the Treasury Management Product:
Rollover Terminations
"I want to withdraw USDC on the Maturity Date"
By default, all loans have automatic loan rollover turned on. This means that principal and interest will be compounded on the maturity date and rolled over into a new loan on the same day (the Loan Commencement Date for the next Loan Cycle). To terminate rollover for part of or the entire loan and receive principal and interest following maturity, lenders must issue a rollover termination notice.
Early Withdrawal Requests
"I want to withdraw USDC as soon as possible"
At anytime, Lenders can issue an Early Withdrawal Request which results in the sale of loan collateral and the repayment of USDC as fast as possible. Lenders will receive the net sale proceeds from the liquidation of collateral, less an Early Withdrawal Request Fee, in USDC no later than the close of business following the completion of the Early Withdrawal Processing Period.
Loan Repayments & Withdrawals
Payment Date
The date on which USDC is due to be delivered to the Lender for Withdrawal is known as the Payment Date. Before or on the Payment Date, USDC will be transferred back into the vault by the Borrower to be withdrawn by Lenders who have issued an Early Withdrawal Request and/or Rollover Termination Notice.
Rollover Termination - Transfer Out Window
For Rollover Terminations, the Payment Date follows the completion of the Transfer Out Window, which is a period of time no longer than two (2) business days following the Loan Maturity date.
Net Inflows and Outflows
Where there is a Net Inflow for the upcoming loan cycle (more USDC has been lent in than is to be withdrawn), the Transfer Out Window will be immediate and USDC can be withdrawn on the Loan Maturity Date.
Where there is a Net Outflow for the upcoming loan cycle (more USDC is to be withdrawn than to be lent in the next cycle), the Transfer Out Window will take no more than two (2) business days. This is to account for the time the Borrower requires to convert USD to USDC and transfer it back into the vault for withdrawal.
The Transfer Out Window will be almost immediate in the case of Net Inflows and will be a maximum of two business days in the case of Net Outflows.
Early Withdrawals - Early Withdrawal Processing Period
For Early Withdrawal Requests, the Payment Date is no later than the close of business on the business day after the completion of the Early Withdrawal Processing Period. This is set as two (2) business days as a default and confirmed via Loan Confirmation.
The Early Withdrawal Processing Period accounts for the time the Borrower requires to sell loan collateral, receive USD, convert USD to USDC, and transfer it back into the vault for withdrawal.
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