Conditions: Drawable Bonds 

Structure

When you enter conditions, you enter the general condition characteristics followed by the individual condition items of the various condition types. Also, under the general condition characteristics, you can access the editing functions for the redemption schedule sets and their redemption schedules.

General Condition Characteristics

Here we distinguish between the fields that are predefined by the system (include the required-entry fields) and those that you can set up yourself using the field selection function in Customizing (under Securities ®  Master Data ® Product Types ®  Define Product types).

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.

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

Repayment area

·         Repayment type (required entry). Choose 'InstalRepayt'.

·         In the Active set field choose the redemption schedule set (RS set) that is to be the active redemption schedule set. You can assign various redemption schedule sets (RS sets) to a class. If you assign only one RS set to a class, then this is the active RS set. If more than one RS set exists, then you choose which of them is to be the active set. The securities account cash flow for the class shows the planned records for the repayment flows. These are taken from the active redemption schedule data from the active redemption schedule set.

To create and edit redemption schedule sets and redemption schedules for a class, choose  (Detail Repayt plan sets).

See also:

Edit Redemption Schedule Sets and Redemption Schedules

Effective interest rate area

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

-         Price specification

-         AIBD/ISMA

-         MOOSMÜLLER

-         BRAES

-         US method

-         linear

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.

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

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

Condition Items

The following sections describe how to enter condition items for bonds with redemption schedules.

In Customizing you assign a range of different condition types to the various product types belonging to this product category.

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 Securities ® Master Data ® Product Types ® Condition Types ® 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

·         Variable Interest and Interest Rate Adjustment

·         Repayment Rate

·         Repayment Price

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).

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). 

·         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.

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

The cash flow displayed is that resulting from the active redemption schedule in the active redemption schedule set.

·         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.