This ontology defines concepts that are common to all debt instruments, such as debt, borrower, lender, debtor, creditor, interest, principal, and the like. It is designed to be used by various other FIBO specifications, including but not limited to SEC/Debt and LOAN.
Copyright (c) 2016-2022 EDM Council, Inc.
Copyright (c) 2016-2022 Object Management Group, Inc.
The https://spec.edmcouncil.org/fibo/ontology/FBC/DebtAndEquities/Debt/ version of this ontology was added to the FBC domain via the FIBO 2.0 RFC in support of several FIBO debt-oriented initiatives.
The https://spec.edmcouncil.org/fibo/ontology/FBC/DebtAndEquities/Debt/ version of this ontology was modified to add several common day count conventions used to calculate the amount of accrued interest or the present value when the next coupon payment is less than a full coupon period away, to support collateral agreements such as deeds of trust, UCC filings and the like, to add the concept of a rate reset time of day, to eliminate duplication of concepts in LCC, to simplify addresses, and to merge countries with locations.
The https://spec.edmcouncil.org/fibo/ontology/FBC/DebtAndEquities/Debt/ version of this ontology was modified to add the concept of an interest rate cap as a potential provision with respect to interest rate terms.
The https://spec.edmcouncil.org/fibo/ontology/FBC/DebtAndEquities/Debt/ version of this ontology was modified to make redemption provision a child of contractual commitment and move it to financial instruments, as such provisions apply to preferred shares and other instruments in addition to debt.
The https://spec.edmcouncil.org/fibo/ontology/FBC/DebtAndEquities/Debt/ version of this ontology was modified to move the concept of an extension provision from Debt to Contracts to support representation of preferred shares and other extendable contracts, eliminate remaining circular definitions, integrate concepts defining credit facilities, and refine the concept of collateral to differentiate collateral that is real property from financial assets such as cash, various accounts, securities, and receivables.
The https://spec.edmcouncil.org/fibo/ontology/FBC/DebtAndEquities/Debt/ version of this ontology was modified to use the generic statistical measures and measurements now in FND.
the process of accumulating interest or other income that has been earned but not paid
There are legal contractual terms for the accrual of interest, as distinct from the payment of interest.
the process of reduction of debt or other costs through periodic charges to assets or liabilities, such as through principal payments on mortgages
a schedule of periodic payments (repayment installments) that specify changes in the balance of the debt over time
Payments are divided into equal amounts for the duration of the loan or debt instrument, making it the simplest repayment model. A greater amount of the payment is applied to interest at the beginning of the amortization schedule, while more money is applied to principal at the end.
party to a debt instrument that is obligated to repay the amount borrowed (principal) with interest and other fees according to the terms of the instrument
upper bound on the total amount of money that a lender believes a party has the ability to repay as of some point in time
asset offered as security, pledged as an inducement to another party, to lend money, extend credit, or provision securities
written contract that specifies terms, over and above those specified in a promissory note, loan, or other debt instrument, under which the collateral must be made available to the lender
Examples include deeds of trust and uniform commercial code (UCC) agreements.
committed credit facility
credit facility that is a confirmed source of financing for the borrower, as long as the borrower meets the conditions of the agreement
committed sub-facility
contractually committed portion of a credit facility that is available to the borrower and may be associated with some specific collateral
contractual agreement in which a debtor receives something of value and agrees to repay the creditor at some date in the future, in some form (e.g., cash, securities, etc.), generally with interest
credit facility
credit agreement that allows the borrower to periodically take out money over an extended period of time rather than reapplying for a loan every time they need funds
Credit facilities include revolving loans/lines of credit, committed facilities, letters of credit, and most retail credit accounts. They may define sub-facilities to which the lender is prepared to commit for specific purposes.
master commitment
a party to whom an obligation, such as an amount of money, or good, or performance of some service exists
a business recurrence interval convention that is used to calculate the number of days in an interest payment, which applies to the amount of accrued interest or the present value for debt instruments
Day-count conventions apply to swaps, mortgages and forward rate agreements as well as bonds, each of which has its own day-count convention, which varies depending on the type of instrument, whether the interest rate is fixed or floating, and the country of issuance. Among the most common conventions are 30/360 or 365, actual/360 or 365, and actual/actual. A 30/360 convention assumes 30 days in a month and 360 days in a year. An actual/360 convention assumes the actual number of days in the given month and 360 days in the year. An actual/ actual convention uses the actual number of days in the given interest period and year.
day-count convention that uses 30 days in a month and 360 days in a year for calculating interest payments
See ISDA 2006 Section 4.16(f), https://web.archive.org/web/20140913145444/http://www.hsbcnet.com/gbm/attachments/standalone/2006-isda-definitions.pdf for more details on the calculation.
This convention is used for US corporate bonds and many US agency issues. It is most commonly referred to as '30/360', but the term '30/360' may also refer to any of the other conventions of this class, depending on the context. See ISDA 2006 Section 4.16(f), https://web.archive.org/web/20140913145444/http://www.hsbcnet.com/gbm/attachments/standalone/2006-isda-definitions.pdf for more details on the calculation
day-count convention that uses 30 days in a month and 365 days in a year for calculating interest payments
See ICMA Rule 251.1(ii), 251.2, and ISDA 2006 Section 4.16(g), https://web.archive.org/web/20140913145444/http://www.hsbcnet.com/gbm/attachments/standalone/2006-isda-definitions.pdf for more details on the calculation.
See ISDA 2006 Section 4.16(h), https://web.archive.org/web/20140913145444/http://www.hsbcnet.com/gbm/attachments/standalone/2006-isda-definitions.pdf for more details on the calculation.
day-count convention that uses the actual number of days in each month and 360 days in a year for calculating interest payments
See ICMA Rule 251.1(i) (not sterling), ISDA 2006 Section 4.16(e), https://web.archive.org/web/20140913145444/http://www.hsbcnet.com/gbm/attachments/standalone/2006-isda-definitions.pdf for more details on the calculation.
This convention is used in money markets for short-term lending of currencies, including the US dollar and Euro, and is applied in ESCB monetary policy operations. It is the convention used with repurchase agreements.
day-count convention that uses the actual number of days in each month and 365 days in a year for calculating interest payments
See ISDA 2006 Section 4.16(d), https://web.archive.org/web/20140913145444/http://www.hsbcnet.com/gbm/attachments/standalone/2006-isda-definitions.pdf for more details on the calculation.
day-count convention that uses the actual number of days in each month and actual number of days in that year for calculating interest payments
See ICMA Rule 251.1(iii), ISDA 2006 Section 4.16(c), https://web.archive.org/web/20140913145444/http://www.hsbcnet.com/gbm/attachments/standalone/2006-isda-definitions.pdf for more details on the calculation.
This method ensures that all coupon payments are always for the same amount. It also ensures that all days in a coupon period are valued equally. This is the convention used for US Treasury bonds and notes, among other securities.
See ISDA 2006 Section 4.16(b), https://web.archive.org/web/20140913145444/http://www.hsbcnet.com/gbm/attachments/standalone/2006-isda-definitions.pdf for more details on the calculation.
This convention accounts for days in the period based on the portion in a leap year and the portion in a non-leap year.
an obligation to pay something, such as an amount of money, good, service, or instrument
In cases where the debtor and payer are the same legal person, then a debt is equivalent to a payment obligation.
contract terms that specify the formal rights and obligations of borrower and lender under a contract in which funds are lent from the one party to the other
These may be terms in a loan contract (including for example a mortgage contract) or they may be the contractual terms of a debt security.
a party that owes a debt or other obligation to another party
an interest rate that does not fluctuate over the lifetime of a loan or other debt instrument
a variable interest rate that is based on a specific index or benchmark rate
Certain revolving credit, such as credit-card related debt, may adjust after a specified period of time to an absolute rate stated in the agreement (variable but not floating) rather than based on a benchmark rate (variable, floating).
The index used to determine the specific interest rate is generally included in the terms of the loan. In most cases, lenders will also charge a spread, or added percentage points on top of the established index rate. If a loan is billed as prime plus 2.5 percent, for a prime rate of 3.5 percent, the terms of the loan will require the borrower to pay off a 6 percent interest. Floating interest rates typically involve periodic reset dates for the loan, particularly when the index rate changes. Resets may also occur online at market predetermined intervals, with yearly adjustments being a common arrangement.
amortization in which the very last payment (which, if the schedule was calculated correctly, should be equal to all others) pays off all remaining principal and interest on the loan
the cost of using credit, or another's money, expressed as a rate per period of time, payable by a debtor to a creditor in consideration of the credit extended to the debtor
contract terms for payment of interest on a debt
Interest is usually payable on any outstanding principal amount, therefore interest relates to the amount of debt outstanding at any given point of time, not to the principal amount advanced at the time that the loan was advanced or the debt security issued (aside from the initial payment).
Note that in most cases, the dates and payment frequencies for interest will coincide with the dates and payment frequencies related to the principal.
a party that extends credit or money to a borrower with the expectation of being repaid, usually with interest
a variable interest rate charged by a financial institution for borrowing that is not prescribed as a margin over base rate but is set from time to time by the institution
amortization in which the payments made do not cover the interest due
asset pledged as collateral that is a financial asset, rather than physical asset
Examples of non-physical collateral include, but are not limited to, bank deposits, accounts receivable, stocks, bonds, other securities, and the like.
amortization in which the very last payment the last payment due may be a large balloon payment of all remaining principal and interest
asset pledged as collateral that has a material form, i.e., is a physical asset of the obligor
Examples of physical collateral include, but are not limited to, real estate, equipment, vehicles, spare parts, inventory, goods, supplies, fixtures, and leasehold improvements.
with respect to a debt: the value of an obligation, such as a bond or loan, raised and that must be repaid at maturity; for investments: the original amount of money invested, separate from any associated interest, dividends or capital gains
contract terms that specify requirements for repayment of the principal
negotiable instrument that is an unconditional and unsecured promise by one party to another that commits the principal party to pay a specified sum on demand or within a specified time frame under specified terms
Promissory notes are generally fully fungible.
time of day that an interest rate is reset, as indicated by some interest rate authority or market data provider
Examples include certain rates published by the Federal Reserve Board in their H.15 schedule, which are published at 4:15 pm on business days that are not holidays in the US.
retail credit facility
credit facility that is a loan or line of credit used by retailers and real estate companies
Consumer credit cards are retail credit facilities, for example.
revolving loan facility
credit facility that enables the borrower to withdraw funds, repay, and withdraw again
Revolving credit facilities are essentially lines of credit with variable interest rates.
sub-facility
portion of a credit facility extended to the borrower for some purpose, possibly per some schedule specified in the facility
Each sub-facility may have separate terms, and may be or include individual promissory notes, depending on the facility. The amount of associated with the individual sub-facilities sums to the total credit facility amount. Sub-facilities may, individually, have a stated purpose, such as to cover inventory, equipment, accounts receivable, working capital, letters of credit, and so forth.
uncommitted credit facility
credit facility that has yet to be confirmed as a source of financing for the borrower
uncommitted sub-facility
sub-facility that has yet to be confirmed as a source of financing for the borrower
an interest rate that is allowed to vary over the maturity of a loan or other debt instrument
links contractual terms embedded in a contract, such as interest or repayment terms to the element those terms apply to
identifies the convention that defines how interest accrues on something, that is the number of days in a month and days in a year that are counted when performing interest accrual calculations
indicates an amount of money available for an individual or organization to borrow
relates a contract, such as a debt instrument or credit agreement, to one or more parties that are incurring the debt
the frequency at which interest is added to the principal of the debt over the course of the agreement
indicates the monetary amount of the debt
Represents the total debt amount including principal and interest
the face value of currency units, coins, or securities
the date on which the last interest payment is due
the date from which interest begins to accrue
the date on which the first interest payment is due
the date on which the first payment against the principal is due
the day of the month on which interest payments must be made on the debt
the frequency at which interest payments must be made on the debt
relates something, such as an agreement, or debt instrument, to the rate (typically annual) of interest that is to be paid by the debtor to the creditor on the debt
relates something, such as an agreement, or debt instrument, to the upper bound (ceiling) rate (typically annual) of interest on variable-rate debt that is to be paid by the debtor to the creditor on the debt
relates a contract, such as a debt instrument or credit agreement, to one or more parties that are financing the debt
indicates an amount of money representing the principal, interest, or other amount owed at a specific point in time
indicates the face value of an obligation, such as a bond or loan, that must be repaid at maturity, i.e., the base amount raised by a mortgage or other debt instrument
This is not the balance of the debt at a point in time, but the amount drawn down at a specific point in time, after which (for interest bearing debts) interest becomes payable. Semantic Modeling note This term is over-ridden for specific kinds of debt (securities, loans) and is therefore not needed in any data model. It is included here to define part of the meaning of the Debt Finance term. It is a Relationship Fact and strictly speaking should be regarded as being specialized and over-ridden by the terms in the Loan and Security classes, however it is modeled here as a "Referenceable Archetype" meaning that it appears in diagrams as a textual entry not a relationship line, and so it is not possible to formally show this specialization.
the day of the month on which payments on the principal must be made
the frequency at which payments on the principal must be made
relates an instrument to the date by which the principal must be repaid in full
Depending on the terms of the instrument (debt security, such as a bond, loan, etc.), this may be the date of a single payment of the debt principal or of the completion of scheduled partial redemption payments.
links the process of reduction of debt or other costs through periodic charges to the relevant asset or liability
relates something to something else on which it rests, or that supports it in some way
relates some collateral to a credit agreement or debt instrument for which the property has been pledged as security for the debt
relates a credit agreement or debt instrument to property pledged as security for the debt
links a monetary amount that is the cost of using credit to the debt that it applies to
links a creditor to a debt that is outstanding and payable to them
links a debt to the party to which it is payable
links the value of a debt, excluding any interest or other costs of using credit, to the debt that it applies to