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Can 4.6C manage variable rate financial instruments?

In your answer to an earlier question on TR-TM functionality you said the SAP Treasury module can manage variable rate financial instruments, such as variable rate bonds. Is this true in 4.6C release? I have not been able to figure out any way to do rate changes in our system.

In your answer to an earlier question on TR-TM functionality you said the SAP Treasury module can manage variable rate financial instruments, such as variable rate bonds. Is this true in 4.6C release? I have not been able to figure out any way to do rate changes in our system.
Yes, you can manage variable rate financial instruments in the Money Market Module of the 4.6C Treasury Transaction Manager (TR-TM). But changing the interest rate is a manual activity rather than an automated activity as is the case with the new Money Market Module Interest Rate Instrument that is available in Corporate Finance Management (CFM) and the 4.7 Enterprise Release.

To manage variable rate bonds in 4.6C you can create a Product Type in the Money Market Module using the Fixed-Term Deposit Product Category (510). When you create the contract in the system to represent the variable rate bond you enter the initial interest rate of the instrument as if it were going to be a fixed-rate instrument. When the rate on the bond changes, go into the contract using the change mode and click on the "Conditions" button (Shift + F6). Next, double-click on the interest rate condition line item for the nominal interest to get to the "Conditions-Details: Interest"-screen, then use the copy button to copy the existing interest condition to a new interest condition for the new interest period. Enter the effective date of the new interest condition as the first day of the period for which the new interest rate is valid and enter the new interest rate into the interest condition. Finally, enter the appropriate dates for the new "Period end" and the new payment "Due date" and save the new interest condition. These steps are then repeated to create a new interest rate condition each time the interest rate changes on the bond or other variable rate financial instrument. What you end up with is a single contract with a unique interest rate condition for each interest rate period.
This was last published in August 2003

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