Interest Rate Adjustment 

Use

As we based the transaction on a variable interest rate, the calculation of the reference interest rate is made two days before the maturity of the interest rate adjustment. You can trigger this interest rate adjustment either manually or automatically.

You can only adjust the interest rate automatically if your computer has a datafeed interface.

Manual Interest Rate Adjustment

  1. Call up the transaction as follows:
    2.

    Menu Path

    From the Derivates node choose: Back office ® Interest Rate Adjustment ® Create

    Transaction Code

    TI10

  2. Enter the following data:
    3.

    Field

    Data

    Description

    Company code

    1000

    IDES AG

    Transaction

    XXX

    You need the order number to select the relevant data.

  3. Choose .
  4. Enter the following data:
    5.

    Field

    Data

    Description

    Interest rate

    Current value

    The value entered is the basis for the interest calculation

    IFixDat

    Copy the planned fixing date

    		  

    In reality the current reference interest rate is calculated two days before the start of term of the swap. To demonstrate an interest rate adjustment, select the Valid from date as the date of interest rate determination.

  5. Choose Copy.

    6. If a dialog box is displayed telling you that the fixing date differs from the actual fixing date, choose .

  6. Choose New flows.

    7. You see the next interest payment due on the basis of a fixed interest rate maintained by you.

  7. Choose and then .

    8. The system displays the message The settlement saved under number XXX.

    This interests payment as well will be displayed in the transaction history.

  8. Choose until the overview tree appears.

 

Automatic Interest Rate Adjustment

Alternatively, you can also process the interest rate adjustment automatically. By using this automatic interest rate adjustment, all relevant transactions in the respective company code are based on the most current reference interest rate.

Automatic interest rate adjustment can only be executed if you did not make any manual interest rate adjustment.

Beforehand, update the data required either via the datafeed interface or manually.

 
  1. Call up the transaction as follows:
    2.

    Menu Path

    From the Derivates node choose:

    Back office ® Interest Rate Adjustment ® Automatic

    Transaction Code

    TJ05

  2. Enter the following data:
    3.

    Field

    Data

    Description

    Company code

    1000

    IDES AG

    Due date until

    1st of the following month

    		  
  3. Choose .

    4. The system displays the message Interest rate adjustment carried out on... (date) and data concerning the transaction, the transaction type etc.

    By using this automatic interest rate adjustment, all relevant transactions in the respective company code are based on the reference interest rate currently valid.

  4. Choose until the overview tree appears.
  5. From the Derivates node choose: Trading ® OTC Interest Rate Instrument ® Display.
  6. Choose .
  7. Choose the Cash flow tab page.

    8. In the cash flow you can recognize the first payment.

  8. Choose until the overview tree appears.