About ILBs

To set up an ILB security master file record, you must first add the underlying index security used to measure the inflation component of the security.

To add the underlying index:

1. In Accounting Center, in the left navigation pane, click Setup > Securities > Manage Securities > Issue Viewer.
   You see the Issue Viewer tool.
2. Click the Add arrow, and then click Index.
   You see the Index panel.
3. Complete the options on the Index panel. See the Manage Indices page for more information.
   The following fields are required: Index Name, Index Description, Ticker, Primary Asset ID Type, Primary Asset ID, Processing Security Type, and Asset Currency.
4. Click Submit.

Add ILB Securities

After adding the underlying index, add the ILB security using the Add Long Term Debt panel. The underlying index security information is stored with the Underlying Information group of fields on the Add Long Term Debt panel.

To add the ILB security:

1. In Accounting Center, in the left navigation pane, click Setup > Securities > Manage Securities > Issue Viewer.
   You see the Issue Viewer tool.
2. Click the Add arrow.
3. Point to Fixed Income and click Long Term Debt.
   You see the Long Term Debt panel.
4. Complete the options on the Long Term Debt panel.
   The system uses the value in the Processing Security Type field on the Long Term Debt panel to identify the type of long term debt instrument you are adding. To add an ILB security, select DBFLTP (Inflation Linked Debt Security). Additionally, select Fixed from the Coupon Type Code drop down list. The coupon rate does not change through the life of an ILB security.
   When you select DBFLTP, the system displays additional fields that allow you to enter the underlying index information. Add the underlying index security information in the Underlying Security ID, Underlying Issue Name, Underlying Type, Dated Date CPI, ILB Index Precision, ILB Deflation Protected Maturity, and ILB Calculation Type fields. Eagle supports different inflationary income calculation methods for ILBs, as specified in the ILB Calculation Type field. The dynamic lookup for this field returns all values in the ILB CALC TYPE code category. See the ILB Calculation Type Code Values section for more information.
5. Click Submit.

Add Monthly CPI Index Rates

The monthly index values that are used to measure inflation are stored as variable rate records for the index security in the Variable Rates table, not for the ILB security. The values are three-month trailing values for the CPI index. That is, the processing of an ILB security for the month of May uses the CPI-U data available in February. The system calculates the daily CPI index rates based on the monthly values stored in the Variable Rate table. In the system, only the CPI rate for the first day of each month is needed to perform this calculation. You should not enter the intermediate daily CPI rates because doing so can cause incorrect calculations. Use the List Variable Rates panel to view the CPI rates entered in the table. See the Manage Variable Rates page for more information. The calculated daily CPI rates are also available for review in the income table and cost object. Note the source for the CPI-U rates should match the source on the entity record for the security that holds the ILB bond. If the sources do not match, the system cannot calculate the ILB index ratio.

To add the monthly CPI index rates:

1. In Accounting Center, in the left navigation pane, click Setup > Securities > Manage Securities > Issue Viewer.
   You see the Issue Viewer tool.
2. Open Issue Variable Rates, and then click Add Variable Rate.
   You see the Add Variable Rate panel.
3. In the Source Name field, enter the variable rate source of the entity.
4. In the Asset ID Type field, enter the primary asset identifier type for the security, such as CUSIP, ISIN, and SEDOL.
5. In the Asset ID field, enter the identifier of the CPI index security.
6. In the Issue Name field, enter the name of the CPI index security.
7. In the Effective Date field, enter the CPI index date.
   This value should be the day of the month that corresponds to the rate. For example, if you were updating the rate for the CPI-U for May, the effective date would be 5/1.
8. In the Variable Rate field, enter the rate of the monthly CPI index.
9. In the Schedule Period Types field, optionally specify the index reset frequency for reporting purposes.
10. Click Submit.

Long Term Debt Panel - ILB Options

The following are the key options for an ILB security. See the Long Term Debt Panel Options page for more information about the Long Term Debt panel. Note options may vary according to your selections. 

ILB Calculation Type Code Values

The following table displays the valid options for the ILB Calculation Type field.