Rollover a Deal

The topic descibes how the user can use this feature roll it over into a new deal instead of liquidating a deal on maturity.

A rollover is a renewal of a deal. The outstanding principal of the old deal is rolled over with or without the interest outstanding on it. When a deal is rolled over (renewed), it is processed in the following manner:

• The original deal is liquidated, and,
• A new deal is initiated

The user can rollover a deal that the user are processing provided it is allowed for the product the money market deal involves.

For a product with rollover defined, specify if deals involving the product must inherit:

• The attributes defined for the ICCB components (interest, charges and fees) from the product, or
• Those defined for the initial deal. This gains significance if the user changed the attributes that the (initial) deal acquired from the product. The rolled over deal will acquire the changed attributes.

In addition, the user has to specify the following for a product defined with rollover:

• Whether it is to be rolled over along with outstanding interest
• Whether the interest that has been accrued on a placement is to be considered a part of the ‘utilized amount’ for the purpose of risk tracking if the user are rolling over a placement with interest.
• Whether tax has to be applied on the rolled over deal
• Whether the principal of the rolled over interest must be taxed

However, when processing a deal, the user can change the attributes that the deal acquires from the product. At the time of processing the deal, the user can indicate if a rollover is to be automatic or manual; the maturity type (fixed, call or notice); the maturity date for a fixed maturity deal; and the notice days.

The user must also indicate if:

• Only the outstanding principal is to be rolled over,
• The outstanding principal is to be rolled over with interest, or
• If a special amount is to be rolled over. (if a part of the principal and interest from the old deal has been liquidated and only the outstanding principal - with or without interest - is rolled over, it is called a special amount).

When a deal is rolled over, the new contract continues to have the reference number of the old deal.