29.2.1.4 Prepayments

Defining Prepayment Methodologies:

Oracle Balance Sheet Planning provides five prepayment calculation methods: Constant, Prepayment Model, PSA, Arctangent, and ADCo (Andrew Davidson and Co.) Prepayment method. Defining the ADCo Prepayment Method:

Use this procedure to define prepayment assumptions using the ADCo Prepayment method. Prerequisites:

Performing basic steps for creating or updating a Prepayment rule.

1. Select the currency to be US Dollar and Product Account Type as an Earning Asset.
2. Select ADCO Prepayment method from the Prepayment method drop-down list. The UI shows the “ADCO Prepayment” method as an available method in the drop-down list, ONLY if the BSP_ADCO function is mapped to the user.
3. Select Refinance or Curtailment from the Calculation drop-down list.
4. The ADCO Prepayment container is displayed containing the index drop-down list which contains IRCs defined in Rate Management including the seven indices to be used with the Adjustable Rate Mortgages(ARMs) meant for ADCo purpose, whose reference currency is always US Dollar. Select the required IRC.
5. Click Apply.