In the Debt Bond panel, you can manually book an open (buy or short sell) and close (sell or buy to cover) trade for convertible bonds. For detailed instructions on using this panel, see Book Trades for Debt Bonds.
About Additional Fields You Can View
When you book a buy of a convertible bond at a premium, you see the following additional fields on the Open Debt panel.
- Convertible Indicator (tag 1531). Displays a value of Y if you select a security with its Convertible Indicator set to Y at the security level. Indicates the selected security is a convertible bond. The panel displays this field as part of the security master lookup.
- Underlying Security Market Price (tag 319). Specifies the price of the underlying security on the trade date of the transaction. This field appears if you select a convertible bond security in the security master lookup fields and that security has a Convertible Indicator set to Y. If you are using the SRPM method, Eagle Accounting use this field along with Underlying Security to Base FX Rate (tag 9) and Underlying Security to Bond FX Rate (tag 7) values to derive the Stated Redemption price at maturity as part of processing the trade. For more information about the SRPM method, see Set Up Amortization Rules for Convertible Bonds.
- Conversion Premium (tag 5727). Specifies the embedded equity option value. For more information about the EEOV method, see Set Up Amortization Rules for Convertible Bonds.
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In prior versions, the Conversion Premium stored the difference between the market value of one share of the bond, and the market value of the shares that would be held if the bond were converted. (Stated Redemption Price at Maturity (SRPM) minus Purchase Price = Conversion Premium). |
About Calculating the SRPM
In prior versions releases of Eagle Accounting, the Open Debt panel calculated, displayed, and allowed the edit of the SRPM value in the Price at Maturity field (tag 42) In this versionrelease, the system no longer calculates the SRPM and displays it on the debt panel. The SRPM is calculated behind the scenes as part of processing the trade and electing to use the SRPM method in the amortization method.
A description of these calculated values follows.
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