# **Recording, validating and maintaining debt data**

The DMS should enable the recording of the following information: i) Terms and conditions of new debt: For loans, this includes creditor information, currency and amount of commitment, issuance/commitment date, maturity, grace period, interest rate, disbursement profile, amortization schedule, details of the various fees charged, agent bank details, and any other special clauses. For securities, this includes the face value, coupon, and tenor.<sup>9</sup> ii) Realized disbursement for loans and proceeds of the securities, denominated in the currency(ies) of disbursement.

iii) Realized debt service information: This includes principal repayments, payment of interest and coupon, and payment of any other fees.

iv) Changes in the original terms or conditions of the loans. _e.g._ , cancellation, write-off, restructuring, prepayment, conversion, switch, buy-back, waiver, etc.

v) Reopening of marketable securities, liability management operations (switch, buyback, split) and repo/reverse repo transactions.

In addition to recording information, the DMS should also have a validation function, with proper internal controls, to ensure that the data recorded are correct. The system should be able to alert users if any of the actual data recorded are not in line with the terms of the loan or securities as initially recorded.

# **Producing payment projections**

The projection of accurate and timely debt service payments is an essential DMS feature. The system should be able to generate a schedule of debt service payments for the whole portfolio, showing upcoming payments (principal, interest, fee), due dates, and the currency and amount of payments. These projections form part of the system’s payment instructions and include any loan detail changes, such as modifications to actual disbursement profiles or fee waivers. Moreover, debt managers should be able to generate the debt servicing schedule for as long a period as required because this information is an essential input for the government’s overall cashflow forecasts. Payment instructions can be transmitted directly to the central bank or to the central bank through a treasury unit’s system if the unit is separate from the DMO.

# **Generating reports for analyses and decision support**

Two of the most essential functions of a DMO are reporting the status of debt to concerned parties and conducting debt related analysis. DMOs generally provide debt-related input for national budget preparation and reports on debt to government officials and the public. They are also responsible for conducting portfolio analyses and planning future borrowing. A sound DMS should contain a reporting module that can easily produce both standard and customized reports based on accurate data. Debt managers should, therefore, be able to extract the right information, in the format, granularity, and the period they desire, and the extraction should be easy to reformat as required. This functionality facilitates a variety of critical tasks, including compliance, audit, policy decision making and communications. Experience shows that many systems, while able to generate information at the level of an individual loan or security, have challenges producing aggregated portfolio-level reports.

> 9 Details of holders of security are usually held at the central bank that runs the auctions and keeps the registry.

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