A fixed income security is a long term tradable instrument that pays a regular coupon or interest at a fixed rate. Such securities are commonly called bonds, and include government stocks, and corporate bonds. They are generally issued by governments or blue chip companies.
You can automatically reset floating bond coupon rates by running the Reset Floating (Benchmarked) Bond Issue Rates program. For more information, please refer to Chapter 10, Inquiries and Reports.
Use the Fixed Income Securities window to input the purchase and issue of fixed income securities. You can also query and review the records once they are entered.
Set up bond issues. See: Bond Issues.
Navigate to the Fixed Income Securities window.
In the Company field, choose the company for the deal.
In the Counterparty field, choose the counterparty.
If you are acting as a broker for a client, in the Client field choose the client for the deal.
In the Portfolio field, choose the portfolio for the deal.
In the [ ] Descriptive Flexfield, complete the descriptive flexfield information as required. For information on descriptive flexfields, see: Defining Descriptive Flexfields.
Choose the Main Details tab region.
In the Deal Subtype field, choose a deal subtype for the deal. Choose the Sell deal subtype only if you want to short sell the deal. For information on selling fixed income securities, see: Reselling Fixed Income Securities.
In the Issue Code field, choose a bond issue code for the deal. Issue codes are defined in the Bond Issues window.
The Settlement Date, Issue Type, Currency, Maturity Date, Coupon Rate, Coupon Frequency, Next Coupon, Day Count Basis, and Security ID fields are automatically completed based on the issue code selected.
You can choose the View Bond Issue button to display the View Bond Issues window with the details of the bond issue. For more information about bond issues, see: Bond Issues.
If you want to change the settlement date, in the Settlement Date field, enter a new settlement date for the deal.
In the Face Value field, enter the face value of the deal.
Enter one of the following prices or rates, and the other prices or rate are automatically calculated:
Clean Price: The price of the bond excluding accrued interest. The clean price is quoted on a price per $100 basis.
Total Price: The clean price of the bond plus accrued interest.
Yield Rate: The clean price of the bond quoted on a yield basis.
Discount Margin (floating coupons): The rate used to discount the cash flows of floating coupons.
The accrued price and consideration amount is automatically calculated based on the values you enter.
Choose the Interest Details tab region.
In the Coupon Status field, select one of the following coupon statuses.
Cum-dividend: The buyer receives the next coupon amount that is due. The seller must be compensated for the amount of accrued interest for the current coupon period.
Ex-dividend: The seller receives the next coupon amount that is due. The buyer must be compensated for the amount of interest remaining in the coupon period.
If the bond issue is Compound Coupon, Treasury sets the non-updateable coupon status to Cum-dividend.
Choose the rounding method you want to use to calculate interest on the deal in the Interest Rounding field. The possible choices are: Nearest, Round Up, or Round Down.
Choose the days that you want to include when you calculate interest on the deal in the Interest Includes field. The possible choices are: First Day, Last Day, or Both Days.
Note: If you select Both Days for Interest Includes, you cannot use the 30/360, 30E/360, or 30+/360 day count basis.
Complete the fields in the Additional Details tab region and Brokerage/Tax tab region as needed.
Choose the Coupon Summary tab region.
In the Gross Coupon field, the total amount of interest for the fixed income security appears. You can override this calculated interest amount by entering a new interest amount. The System Coupon field shows the original interest amount calculated by the system.
Note: You can only override interest amounts if you have the appropriate user access levels. See: User Access Levels.
Save your work.
You can make a full or partial resale of a fixed income security buy deal anytime before the deal reaches its maturity date. You can also make a full or partial repurchase of existing fixed income security issue deals before the maturity date.
Use the Fixed Income Securities For Resale/Repurchase Summary window to resell or repurchase a fixed income security.
Update your journal structure to account for the resale and repurchase of fixed income securities. See: Defining the Journal Structure.
Update the user access levels for the deal subtypes Repurch and Sell. See: User Access Levels.
Navigate to the Find Fixed Income Securities For Resale/Repurchase window. query the security you want to resell.
To resell a fixed income security, choose the Buy Deals for Resale radio button. To repurchase a fixed income security, choose the Issue Deals for Repurchase radio button.
Enable the Include Matured Deals check box to include deals that have matured prior to the system date.
Complete the Find Fixed Income Securities For Resale/Repurchase window and query the deals that you want. The Fixed Income Securities for Resale or Repurchase Summary window appears, listing all of the deals that match your criteria.
In the Amount field of each deal that you want to resell or repurchase, enter the resale or repurchase amount. The resale or repurchase amount must be less than or equal to the remaining face value of the deal.
Note: You can group more than one issue deal in the same resale or repurchase, provided that all issue deals have the same issue code, product type, and portfolio code.
Choose the Complete Details button. The Fixed Income Securities window appears with some of the deal resale or repurchase details already completed.
Complete the details for the resale or repurchase deal.
Save your work.
Use the Coupons window to view a summary of the coupons for a fixed income security deal.
In the Fixed Income Securities window, query the security for which you want to review the coupon summary.
Choose the Coupons button. The Coupons window appears.
Use the View Fixed Income Securities window to view the details for a fixed income security deal.
In the View Fixed Income Securities window, query the deal that you want to view.
If you want to review the coupon summary for the selected deal, choose the Coupons button.