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Loans as bonds

Loans are used to borrow money for investment purposes. A loan with regular interest payments is set up in FA Back as a bond. You can track accrued interest, calculate interest payments, and handle loan repayment.

Create a loan security

To create a loan security:

  1. Choose New → New security in the top menu. The Security window opens.

  2. Fill in the fields:

    • Basic info tab:

      • Code, Name – Create a code and name that contain information about the loan dates and currency.

      • Security type – "Debt instruments (BOND)".

      • Sub type – "DY: Money Market Instruments".

      • Multipliers – "100".

      • Issuer – Choose the contact of the counterparty.

    • Extra info tab:

      • Issue date – Loan start date.

      • Issue price – "1".

      • Maturity date – Loan end date.

      • Maturity price – "1".

      • Calendar (day count convention) – The agreed day counting convention.

      • Frequency – "Once".

      • Fixings for floating rate note – Start date and agreed loan rate.

      You can have multiple coupon periods both with a fixed or floating rate. The security configuration in the Extra info tab is the same as for a bond.

Add a loan to a portfolio

To add a loan to a portfolio, use a sell transaction. Enter an ID from another system or your counterparty in the Reference field and choose the counterparty in the Counterparty field.

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Create interest payments and expirations

Interest payments and maturity processing are handled in the same way as for bonds. To generate coupon payments and expirations, create and run a corporate action. An important note: use the "Expire short position (EXPSH)" transaction type.

To create and run a corporate action, use one of the tools that suits you best:

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