Bonds: Editing Conditions

When you enter conditions, you enter the general condition characteristics followed by the individual condition items of the various condition types.

As far as the general condition characteristics are concerned, we distinguish between the fields that you can set up yourself using the field selection function in Customizing and those that are predefined in the system. The latter type includes fields in which you are required to enter data for technical reasons (required entry fields).

General Condition Characteristics

Interest calculation area

  • Interest calculation method - the system provides you with a selection of methods (required entry)

The interest calculation method is defined by the ratio TAGE / TAGEBASIS (days / day basis).

See also : Using the F-1 help for the field Interest calculation methods , you can see the definitions of the different methods used to calculate the Days and the Day basis.

Note Note

In the conditions detail, you specify for each condition item whether interest is to be calculated linearly or exponentially.

End of the note.

Repayment area

The following repayment types (required entry) are supported for bonds:

  • Final due date

  • Perpetual bonds

  • Installment repayment

Effective interest rate area

  • Effective interest rate method - the system provides a selection of 5 methods:

  • Price specification

  • AIBD/ISMA

  • MOOSMÜLLER

  • BRAES

  • US method

  • Interest calculation frequency: Specified in months, the frequency is required for the interest calculation methods for Moosmüller and for the US Treasury procedure.

  • Effective interest rate: Use the button ( Calculate effective interest rate ) to display the effective interest rate calculated from the class conditions.

Note Note

The effective interest rate is calculated for the cash flows that are marked as relevant.

See also: The documentation for the Customizing activity Define Flow Types in the securities area of the Implementation Guide (IMG) .

End of the note.

Condition Items

The following sections each describe how to enter condition items for bonds , convertible bonds and warrant bonds .

You assign a range of different condition types to the various product types from these product categories in Customizing.

You can represent fixed-interest, percentage-quoted and unit-quoted bonds as well as variable-interest bonds using these condition types.

You can set most of the entry fields for each condition type as optional, required or display fields using the field selection function in Customizing by choosing Define Condition Types. The sample Customizing settings delivered with the system allow you to enter the condition types described in this section.

Nominal Interest for Percentage-Quoted Bonds

Nominal Interest for Unit-Quoted Bonds

Final Repayment

Repayment Rate

Repayment Price

Variable Interest and Interest Rate Adjustment

Notes for Processing

  • When you create a new class, the system displays different condition items according to the entries you made in Customizing when you chose Assign Condition Types to Condition Groups . If a condition type was set to Hide in Customizing, it is not displayed, and you have to call it up by choosing ( Insert additional items).

  • If a condition item is not filled, it is not displayed in the change mode. You can, however, include it again by choosing ( Insert line).

  • To enter a condition type more than once - for example, in order to show a staggered rate of interest - go to the corresponding condition item and choose ( Insert line).

Note Note

The first condition item is valid until the Effective from date of the second condition item.

By pressing ( Duplicate line ), you can make it easier to enter the second condition item for the same condition type. The selected condition item will be copied, and you simply have to enter the Effective from' date and other changes (e.g. the new interest rate and/or a new interest payment frequency).

End of the note.

  • To add a zero condition , for example, to suspend an interest payment one year before the final due date, add a new condition item. Enter the Effective from date for the zero conditions, and go to the condition details . There, you enter the indicator for zero conditions in the field Condition form.

  • Choose the Cash flow button in the upper part of the screen to check your entries. In the fictitious Cash Flow you see whether the entries result in the required flows.

Note Note

The cash flow is only displayed in position currency. Local currency is not translated since no company code is recognized within the class data.

End of the note.

  • To delete a condition item, select it and choose ( Delete line ).

  • You can see a padlock icon in front of every condition line. The padlock will either be opened or closed .

  • open means that the condition item can still be changed.

  • closed means that it cannot be changed because some flows have already been posted for this condition item.