8.2.75.2 Module Usage

Oracle ALM uses IR_MARGIN_TYPE_CD to determine whether provided Margin, Margin Gross is fixed Rate or calculated using the Forecasted Interest Rate.

Expected IR Margin type code values as follows:

Table 8-22 List of IR Margin Type Codes

Code Value	IR Margin Type
0	Rate
1	Percent

• When IR_MARGIN_TYPE_CD = 0 (Rate), data is provided as a Fixed spread in Margin columns. Given Margin is added to the Forecasted Rate.
• When MARGIN_TYPE_CD =1, MARGIN, and GROSS MARGIN data is provided as Percent of forecasted rate. The engine uses Margin Percent data along with Forecasted Raw RateC to calculate Margin/ Margin Gross. The margin on reprice event is calculated as:

  MarginC = Margin % * Raw RateC.

  For example:

  IR_MARGIN_TYPE_CD=1, MARGIN=10, Raw Rate derived on next reprice event= 5%. 6% on following Repricing Event.

  On the Next Reprice Event:

  MarginC= Margin Percentage (in percentage) * Raw Rates (in percentage)

  MarginC = 10% * 5% or {[ (10/100) * (5/100) ] * 100} = 0.5%. Calculated Margin is added to raw rate of 5%, for a net rate of 5.5%

  On the following Reprice Event:

  MarginC = 10% * 6% or {[ (10/100) * (6/100) ] * 100} = 0.6%.Calculated Margin is added to raw rate (6%), for a net rate of 6.6%.

  Any teases, rate caps/floors, and rounding are applied thereafter to derive the rate that is applied to the record.