Interest Rate Floor

Created by Erik Åkerlund, Modified on Wed, 07 Feb 2024 at 02:12 PM by Jenny Johansson

Interest Rate Floors are possible to register on Loan/Deposits, Bonds, Bank Account Interest and IRS. There are two options to choose from, Zero Floor Base interest and Zero Floor Total Interest.


Zero Floor Base Interest: This means that if the base interest is negative the base interest will be set to zero.


Zero Floor Total Interest: This means that if spread and base interest together is negative, the total interest will be set to zero.


To register Zero Interest Floors choose type of floor in the section below.

Then when fixing the loan in the fixing view, choose Auto Fix and Keep current spreads.  In the below example we have chosen Zero Base Interest Floor.


Click OK and the system will set the base interest to 0% since the base interest of the chosen dates is negative.  Click Save and save the fixed rates.


In tab Transactions on the deal, you can see the rates and the interest amounts for each period.


If you choose Zero Total Interest Floor, the fixing view will show 0% in the Nominal interest column. The base interest column will show the calculated interest value that will give 0% in nominal interest (Base Interest + Spread = 0%). 



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