Create a Municipal Commercial Paper

A municipal commercial paper (CP) is a short-term zero-coupon transaction. It only has two flows: an initial drawing on the start date and a repayment on the maturity date.

 

Prerequisite

Contact your Finance Active consultant to:

 

Navigate to the Debt & Derivatives Application
  1. Log in to your Fairways Debt account, e.g. https://login.financeactive.eu/.
  2. Select a customer account.
  3. Navigate to Applications > Debt & Derivatives.

 

Create a Municipal Commercial Paper
  1. Click Add Transaction > Loan > Municipal Commercial Paper.

Portfolio_AddTransaction_EN.png

  1. Complete the form with all relevant details.

Note: Fields marked with an asterisk * are mandatory.

Field

Description

Reference Code

Unique reference of the transaction. Identifies the transaction in the portfolio.

Note: The reference must be unique among all the entities managed in the account.

External Reference Code

Used by external systems to identify the transaction. Used when transactions are imported from or exported to another system.

Principal

Principal amount of the transaction.

Currency

Currency of the principal amount.

Borrower

Borrowing entity in the system.

Note: If the municipal CP is booked in an municipal CP program, the borrower is automatically filled out with the value defined in the program.

Lender

Can be:

  • Internal (an entity in the system) or external (a commercial bank)
  • The capital market, i.e. Market, a hardcoded counterparty defined by Fairways Debt

Note: If the municipal CP is booked in an municipal CP program, the lender is automatically filled out with the value defined in the program.

Transaction_EN.png

Field

Description

Trade Date

Date at which the transaction has been traded. From that date, the system takes the transaction into account as an item of the portfolio.

Start Date

Unadjusted start date of the transaction.

Maturity

Unadjusted maturity date of the transaction.

Dates_EN.png

Field

Description

Yield

Annual yield of the transaction.

Spread

Spread (or margin) value in percentage.

Day Count Convention

Used to compute the day fraction of an interest accrual period.

In Advance Interest Payment

Defines whether the interest amount should be paid at the start of the period.

If enabled:

  • The initial drawing amount of the municipal CP is equal to the principal amount minus the interest amount.
  • The repayment amount is equal to the principal amount.

If disabled:

  • The initial drawing amount is equal to the principal amount.
  • The repayment amount of the municipal CP is equal to the principal amount plus the interest amount.

Indexation_EN.png

Field

Description

Interest Calculation Adjustment

Adjustment mode for the interest calculation. The nominal start and end dates of the accrual period will be adjusted accordingly before computing the interest amount.

Payment Date Adjustment

Adjustment mode for the payment date.

Payment_EN.png

  1. Enable Show Details after Validation to automatically open the new municipal CP profile once created.
  2. Click Apply.

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The new municipal commercial paper displays in the draft portfolio.

MunicipalCommercialPaper_Created_EN.png

 

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