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missing nominal flow and interest at THMMM

Former Member
0 Kudos

Dear Expert,

I use tcod THMMM to upload the flow in MM into HedgePlan.

However system picks up only the repayment flow only.

How can I get the nominal and interest flow in heddplan automatically?

Any missing on the setup?

Please suggest.

Rgds,

PNS

Accepted Solutions (0)

Answers (1)

Answers (1)

Former Member
0 Kudos

Hi,

Check whether the nominal interests are already part of a hedge plan or a relationship for hedging against interest flows. Then the final repayment flows will only be picked for forex exposure. Also check the dates of the flow.

Please give some more info on your money market transaction.

Regards,

Ravi

Former Member
0 Kudos

Dear Ravi,

The loan contract is as below:

1) cash flow of loan with 1 year, fixed interest 5%, 6 month frequency of interest and repayment.

at 01.11.2011 -> 1105+ 100,000 USD

at 01.05.2012 -> 1200- 2,527.78 USD

-> 1130- 50,000 USD

at 01.11.2012 -> 1200- 1,277.78 USD

-> 1130- 50,000 USD

2) Create hedge plan with risk category as interest rate risk.

- Z001

3) use THMMM to upload.

I can't find the drawdown flow which is on 01.11.2011 because of positive flow? SAP will not insert this flow into the hedge plan?

4) Then create forward 60B by choosing hedge mgt update both 2 "insert into existing hedge plan" and 3 "selecting existing exposure". However this forward is not in the hedge relationship. Why?

please suggest.

Former Member
0 Kudos

Hi,

Just a quick question, are you trying to hedge your interest risk or your forex risk.

If You have created a hedge plan with category interest rate risk, then you will not be able to hedge it with 60B which is forex forward. Forex forward is used to hedge your forex exposures. Hence your hedge plan should have risk category as forex risk.

Regards,

Ravi

Former Member
0 Kudos

Dear Ravi,

Thanks for your suggestion.

However, one last query, when hedge plan is created as "interest rate risk", THMMM upload without Nominal flow (MM1105), so I have to create this exposure manually or actually this flow is not relevant for hedging (that's y THMMM doesnot upload this flow into hedge plan) ?

Rgds,

Former Member
0 Kudos

Hi,

When you have a money market deal lets say an interest rate instrument with variable interest rate, you would have to hedge against the interest flows only as the final repayment is a fixed flow, there will be no interest rate risk associated with it. When the flows are in foreign currency, then your hedge category has to be forex risk and then you will have to hedge against the repayment/maturity flows.

Regards,

Ravi