About Security Reference Data for PIK Bonds

You can set up security reference data for PIK Bond corporate action processing and URGL processing.

Set Up Securities for PIK Bond Corporate Actions

To set up a PIK bond corporate action, the security master record you enter for the announcement must have a processing security type (PST) of DBIBPK (Interest Bearing Debt PIK). When you use this PST, Eagle Accounting accrues and processes accretion and amortization in the normal manner, but the dropping of a coupon and or creation of Baby Bonds, occurs within corporate action processing. You can add securities with this PST using Reference Data Center or using Issue Viewer's Add Long Term Debt panel.

Also set the security's PIK field to Yes to indicate the instrument is a PIK bond.

During corporate action processing, the system creates the transaction based on information you add for the PIK bond corporate actions.

Set Up Schedules for PIK Bond URGL

You can add a PIK receivable mark to market schedule (PIKMTM) for a PIK bond security. If you set the entity-level PIK URGL Flag field to Yes, the system uses that schedule to post URGL on the PIK Bond’s accrued interest receivable balance for a given coupon period.

For more information about setting up PIK receivable mark to market schedules, see Add a Schedule for a Security in Issue Viewer or Manage Schedules. For information about URGL calculations for PIK Bonds, see About Calculating URGL for a PIK Receivable Balance.