8.9.3.2 User-defined Repricing Event

The events of a repricing pattern define changes to the interest rates of an instrument during its life. Every pattern begins with an initial event, which describes the behavior for the initial period.

This initial event is required for the setup of all repricing patterns but is not used in OFS FTP. This feature is used only by Oracle ALM when assigning a rate at the origination of new business and transaction strategy records.

The second event describes the change in behavior after the initial period is over. A third event describes the next change in behavior and so on. In relative repricing patterns, you can also define the number of times an event will be repeated before the next event is triggered.

At least one event must be defined for a repricing pattern. All events are listed in the Repricing Events table. The repricing pattern type, absolute or relative, determines the data required to be populated in the events table.

You have the option to change the repricing pattern type at any time during the creation process. However, changing the repricing pattern type causes the system to automatically refresh the Repricing Events table, and the loss of all the data that you previously entered. Event Detail You define each event with a repricing type of either flat rate or indexed rate. The repricing types determine the event detail characteristics that are available. Flat Rate Selecting the flat rate repricing type allows you to set the rate of the instrument to a fixed value. For example, 6%. The following table describes the event detail characteristics that are available when the flat rate repricing type is selected.

Table 8-4 Event Detail Characteristics: Flat Rate

Characteristic	Description
Net Rate	The new net rate value
Gross Rate	The new gross rate value
Transfer Rate	The new transfer rate value

The flat rate always overrides the caps and floors defined on the instrument record.

Indexed Rate

Selecting the indexed rate repricing type allows you to set the rate of the instrument to an adjustable value, defined as the index rate plus a margin. The following table describes the event detail characteristics that are available when the indexed rate repricing type is selected:

Table 8-5 Event Detail Characteristics: Indexed Rate

Characteristic	Description
Interest Rate Code	The reference interest rate used as the index rate to set gross and net rates. This list of values is pulled from the current Historical Rates database.
Transfer Rate Interest Rate Code	The interest rate used to calculate the transfer rate.
Yield Curve Term	The term used in interest rate code lookups; if left blank, defaults to the term until the next repricing; set with value and multiplier.
Net Margin	Added to the index rate to get the net rate.
Gross Margin	Added to the index rate to get the gross rate.
Transfer Margin	Added to the index rate to get the transfer rate.
Rate Cap Life	The upper limit for gross rate.
Rate Floor Life	The lower limit for gross rate.
Rate Set Lag	Period by which the date of the interest rate used for calculation precedes the event date; set with a value and a multiplier.