8.2.7.2 Module Usage

For Oracle ALM, this field works in conjunction with REPRICE_FREQ to determine the repricing characteristics of an instrument. An ADJUSTABLE_TYPE_CD must be specified if the record is expected to reprice.

Oracle ALM

The code values for this field are as follows:

Table 8-3 List of Adjustable Type Code Values

Code Value	Definition	Repricing Frequency	Repricing Method
000	Fixed	0	No Repricing
030	Administered Rate	> 0	Reprices when IRC (interest rate code) changes.*
050	Floating Rate	> 0	Reprices when IRC (interest rate code) changes.*
250	Adjustable	> 0	Last Reprice Date + Reprice Frequency.*
300	Tiered Balance Interest Rate	If using FTP, reprice frequency should be specified for each tier record.FTP requires this information to determine if a tier record is fixed or adjustable-rate	Depends on Adjustable Type of tier record(s)
500-99999	Reprice Pattern	> 0	Reprices based on pattern definition

*(if not in tease period)

• If the ADJUSTABLE_TYPE_CD = 0 and the REPRICE_FREQ = 0, then the record is fixed-rate.
• If the ADJUSTABLE_TYPE_CD = 30 or 50 and the REPRICE_FREQ > 0, then the reprice dates are driven by forecasted yield curve rate changes rather than by the REPRICE_FREQ. For these codes, Oracle ALM reprices the record by referencing the Forecast Rate Assumption - interest rate code (IRC) when producing cash flow information at the beginning of each bucket. There is one reference to the IRC per modeling bucket.

The database field, NEXT_REPRICE_DATE, is not used when the ADJUSTABLE_TYPE_CD = 30 or 50. The database field, REPRICE_FREQ, is used to determine the yield curve point when the IRC is a yield curve as opposed to a single rate IRC.

Note:

Floating/Administered ADJUSTABLE_TYPE_CD should not be used for instruments with periodic caps and/or floors because periodic caps and floors infer a specific repricing frequency.

If the ADJUSTABLE_TYPE_CD = 250 and the REPRICE_FREQ > 0, then the Repricing Frequency of the record is determined by the REPRICE_FREQ and NEXT_REPRICE_DATE. See these fields for further explanations of the repricing process.

Note:

Records where REPRICE FREQ is frequent, say 1 DAY, user can either model it using ADJUSTABLE_TYPE_CD of 250 (Adjustable) with REPRICE FREQ as 1 D, or using ADJUSTABLE_TYPE_CD as 50 (Floating Rate). As each modeling time bucket has a single forecasted rate for a specific Interest Rate Term Point, the engine would fetch the same rate for ‘n’ number of repricing falling in that modeling time bucket. Both models are equivalent from a business perspective, but use ADJUSTABLE_TYPE_CD as 50 would provide processing efficiency.

1. The value input into the ADJUSTABLE_TYPE_CD overrides the REPRICE_ FREQ value. For instance, even though the REPRICE_FREQ > 0 and if the ADJUSTABLE_TYPE_CD = 0, OFSAA treats the record as a fixed-rate instrument.
2. When an Instrument gets repriced more than once within a payment period, the engine uses the rates for each repricing period within a payment period as prevailing and calculate the interest payment. This is applicable only for Multiple Reprice rates/events in one payment period – Interest in Arrears. For scenarios where the instrument gets repriced multiple times from LAST_PAYMENT_DATE to as of date, the interest cash flow calculation uses accrued interest, if provided, and adds it with calculated interest from as of date till next payment date. If accrued interest is not provided, interest is calculated from the last payment date till the Next Payment Date.
3. ADJUSTABLE_TYPE_CD = 300 is used when a different interest rate is paid/charged for parts of an account balance that fall within set amount ranges. In such a case, additional data for each balance tier is required in table FSI_D_ACCOUNT_RATE_TIERS (sourced from STG_ACCOUNT_RATE_TIERS).For more details, see Tiered Balance Interest Rate.

Oracle Funds Transfer Pricing

Oracle Funds Transfer Pricing references REPRICE_FREQ to determine if the record is an Adjustable-Rate Instrument.