UTECHONLINE ding SEM 2 AY 2021/2022 Time left 2:54:38 ion Question 2 (20 Marks) Case study 1 Mr. Thomas Nelson, Branch Manager of Regional Bank Led to which you are employed as a Junior Loans Officer, has asked you to draft an Offer Letter/ Commitment Letter to Partsforall Ltd. That ut of company has been approved for credit as set out below. At a minimum, your letter should take into account the items listed below together with the covenants attendant on a credit of this nature. Partsforall Ltd, is a new Auto Spare shop being established and owned by Mrs Camille Parks and her husband Samuel. The company has been approved for credit of $20,000,000 broken down as follows: Jestion Demand loan - $12,500,000 at an interest rate of 14% per annum amortised over 60 months at a monthly payment of $290,853.14. Payment due date is to start one month after disbursement date. (Disbursement is to be decided by you, the Junior Loans Officer). Overdraft - $7,500,000 given at a rate of prime plus 3%. The prime rate is currently 11.5% but this can be adjusted depending on money market conditions. Shop numbered 17 at 64 Ever Spring Road, and Registered at Volume 218 Folio 75 is owned by the company on a free-hold basis and has no lien. It is valued at $25,000,000 and the bank's policy allows a loan -to-value ratio of up to 60% to be accepted as collateral security on properties of this nature. Mrs. Parks sister Mrs. Carol Bane owns a 2016 Mercedes Benz motor car with chassis numbered 98435 and valued at $7,000,000 that she has offered to pledge, as collateral security in support of the loan. The bank's policy allows a loan-to-value ratio of up to 50% to be accepted as collateral security on motorcars. Mr. Parks's brother, Mr. Earl Land, has a fixed deposit account in Regional Bank with a balance of 3,000,000 of which he has offered to pledge $1,500,000 as security for the credit facilities. A commitment fee of one and a half percent (1.5%) of the total facility will be charged and receipt of loan payments after 8 days past the due date will attract a fee of 1.20% per month of the payment due. Stamping and registration fee of $30,000 for all the security documentation has been pre- approved by the relevant government departments. (20 marks) 1 A B I E