To close a bond in advance - you first need to decide if it is a 'Close' or 'Continuous' closing option.
This is entered on the Bond Definitions in the Closing Option field.
The most common way is to have the option Close which means that the buy back if you have issued a bond will be written down and closed so it will be a realized result at the close date and also the coupon will be on the outstanding remaining amount after the buy back (if partly closed).
If you have invested in a Bond it is also the Close option to choose.
If an issued bond have a buy back and shall be "closed" or an invested bond shall be sold back and closed:
Choose Close in Buy Sell or Close field. Enter all relevant data. The example below is a buy back on an issued bond.
Example of a partly close deal. The original issue of 500 MSEK. Buy back of 250 MSEK at a price of 98. Important to set correct record date (the date to check who is the owner of the bond) so correct bought/sold interest can be calculated.
Continuous means that the two deals will be running in parallel until maturity date but the coupon will be netted if added on the same deal.
If you wish to pay the coupon on the Sell amount and then receive the coupon on the buy amount you need to enter the buy amount as a separate added deal in the same Deal as the sell transaction but not in the same Transaction tab. Then you will achieve both a paid and received coupon amount on two different transactions.
The original issued amount (Sell):
The buy back and choice Buy instead of Close. The buy back needs to be entered as an added deal on the same Deal ID as the first Sell transaction and the same Bond defintions.
Coupon amount for sell transaction of 500 MSEK will be paid and coupon amount for buy transaction of 250 MSEK will be received on the same dates.
If a buy back shall be made with "Continous" choice on a bond issue that has been entered without via Bond definition set up that is no longer possible and the original issued bond need to be reentered.
First set up the bond in Bond Definition, Bond Definition. Then register the original issued bond deal and then add the buy transaction as an added deal: How to register a Bond deal. The original bond issue deal needs then to be cancelled.
To Close the Bond that has been entered the old way and the issued amount shall be written down, then, press "Close" button and fill in the close deal input form in the former way TS handled it.
For Accounting of closing of Bonds, please see related article;