...

For detailed information about how to manually input factors and use Global Processes to process factors, see Manage Factor Corporate Actions

About Factors

When you use factors, be aware that:

• The Global and Retrospective Amortization processes only use factor values that have a corporate action status of Released.
• When processing an MBS/ABS trade, Eagle Accounting, by default, enters the most appropriate Factor and Factor Date (from the Corporate Action table) in the trade panels. If no factors are found, Eagle Accounting uses a default factor of 1. Regardless of whether a factor is found, you can override the default factor.
• The Trade Date of the paydown transaction is equal to the Effective Date of the factor. Settlement Date is calculated from the Effective Date of the factor, plus the number of Delay that appear in the security master record.
• Trade Date of the payup transaction is equal to the Effective Date of the factor. The Cost Object Settlement Date is equal to the Effective Date of the factor, to properly facilitate the accrual process; on the Cash Object, the Settlement Date is calculated from the Effective Date of the factor, plus the number of Delay Days that appear in the security master record, to offset the receivable.
• Income and principal are received as two different receivables.
• Paydown factors and gain/loss are applied, and calculate at the lot level.
• Eagle Accounting processes all factor payments based on a pro-ration approach. Pro-ration is the process of taking the percentage of par being reduced, and applying that percentage to the amortized cost, to calculate the gain or loss caused by a paydown.
• IO Paydown transactions are for zero cash.
• For Eagle Accounting to calculate the paydown amount, a factor must also exist in Eagle Accounting for the prior month.
• When earnings are rolled backed past a factor date, Eagle Accounting automatically cancels that factor. You have to manually re-trigger the factor, via factor processing, to replay the corporate action.

Process a Paydown Factor Example

This example uses security 31296TG32. The panel information for this security follows.

Trade Details

Security 31296GT32 is purchased in Portfolio MBSDEMOG, with:

...

The 9,975.81 Gain created from the paydown displays in the Income Archive and general ledger when earnings are run.

Process a Payup Example

This example demonstrates payup processing in Eagle Accounting, using the following security information.

Trade Details

The security PAYUP DEMO is purchased with the following attributes:

...

After the new lot is created, Eagle Accounting automatically processes an open adjustment transaction, to allocate a portion of the original face from the parent lot, to the new lot created from the payup transaction. Eagle Accounting allocates the original face by dividing the new lot by the current factor:
(33,188.76 / 2.0079200810) = 16,528.92479
of Original Face is Allocated From Parent to new Lot.
By allocating a portion of the original face, each lot is now in sync based upon the current factor. Eagle Accounting allocates the original face to new lots caused by payup because this allocation facilitates disposition processing. Each lot for disposition processing must have the original face.

About Stale Factor Processing

Stale factor processing automatically corrects trades that are processed with incorrect or stale factors.

...

• Yes. Stale factor processing occurs when you run factor processing and process paydown/payup transactions. Processing ignores the lot level Stale Factor Processing value but updates it to reflect the current value of the entity level Stale Factor Processing field. The system determines rollback by the Settlement date, orders replay by the Trade date, and creates paydowns with the correct quantity.
• No. Stale factor processing does not occur when you run factor processing. Processing ignores the lot level Stale Factor Processing value but updates it to reflect the current value of the entity level Stale Factor Processing field. The system determines rollback by the Settlement date and orders replay by the Trade date.
  
  All activity with the Trade date less than the Paydown date and the Settlement date less than the Paydown date created with a stale factor needs to be rebooked. Paydowns that occur when there is a Close with the Trade date less than the Paydown date and the Settlement date greater than or equal to the Paydown date and have a stale factor do not have the correct quantity until the Close is rebooked with the correct factor. If the Close has the current factor at the time of the paydown, the paydown has the correct quantity.

State Factor Processing Example

An example of Stale Factor Processing follows.

...