What is seniority of portion in SAP FS-BA-PM-CR - Credit Risk?

SAP Term: seniority of portion

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: Sequence in which multiple portions within a collateral agreement are attributed to an exposure.

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• Key Concepts: 
  Seniority of portion is a concept used in Credit Risk Management (CRM) within the Financial Services (FS) Business Application (BA) Portfolio Management (PM) component of SAP. It is a way to prioritize the repayment of a loan or debt in the event of default. 
  
  How to use it: 
  Seniority of portion is used to determine the order in which creditors are paid back in the event of a default. It is based on the terms of the loan agreement and can be used to determine which creditors have priority over others. For example, if a loan has two creditors, one with seniority of portion A and one with seniority of portion B, then creditor A will be paid back first in the event of a default. 
  
  Tips & Tricks: 
  When setting up a loan agreement, it is important to consider the seniority of portion for each creditor. This will ensure that creditors are paid back in the order that is most beneficial for all parties involved. Additionally, it is important to keep track of any changes to the seniority of portion as this could affect how creditors are paid back in the event of a default. 
  
  Related Information: 
  For more information on seniority of portion and other concepts related to Credit Risk Management, please refer to SAP’s documentation on FS-BA-PM-CR Credit Risk Management.