1. Cash Flow Engine Reference Guide
  2. Cash Flow Dictionary
  3. Cash Flow Columns
  4. Percent Sold (PERCENT_SOLD)
  5. Module Usage

8.2.115.2 Module Usage

PERCENT_SOLD is used to calculate the net balance and net payment when the instrument is partially participated out to another financial institution. In the case of a participated loan, the bank partially owns the loan. A bank would participate in the balance of the loan to another financial institution if it was not able to lend the entire amount or if lending the entire amount would exceed the bank's legal lending limits. By selling most of the financing to another financial institution, the bank would earn fee income from servicing the loan and would be able to retain other banking relationships, such as checking accounts.

Oracle ALM and Funds Transfer Pricing Cash Flow Methodologies use PERCENT_SOLD to perform all net balance calculations.

  1. The Cash Flow Engine performs all of the Cash Flow Calculations on a gross balance basis but must net out the principal and interest portions not owned/owed by the bank. PERCENT_SOLD defines the percent of the balances that participated (sold) by the bank.
  2. The calculation performed to net out participations sold is: [Net Balance] = [Gross Balance] * (100 - PERCENT_SOLD)/100
    • PERCENT_SOLD does not apply if an account has been sold to another subsidiary of the same company. In the case of accounts that have had portions sold from one legal entity of a holding company to another, PERCENT_SOLD = 0.
    • For wholly (100%) owned accounts, PERCENT_SOLD = 0.
  3. Oracle ALM only writes out Result Detail balance results in a net of participation.
  4. PERCENT_SOLD must be greater than or equal to zero and must be less than 100%.