Regulatory Alerts2021-06-07
Added · Updated
Regulations on Calculating Weighted Average Maturity of Mortgage Bonds and Loans
The State Committee for Securities of Azerbaijan issued Resolution 27-q to establish standardized procedures for calculating the weighted average maturity of mortgage bonds and loans within mortgage collateral. The regulations mandate specific mathematical formulas to determine these maturities based on outstanding payment amounts, remaining payment periods, and the number of future installments. Implemented under Article 1076-6.6 of the Civil Code, these rules ensure consistent valuation and risk assessment for securitized mortgage portfolios across the financial sector.
“Approved” State Committee for Securities of the Republic of Azerbaijan Resolution № 27-q 17 November 2015 Chairman
R. Aslanly Regulations on calculating the maturity of mortgage bonds and mortgage loans included in the mortgage collateral by the method of weighted average
- General provisions 1.1. These Regulations have been prepared in accordance with Article 1076-6.6 of the Civil Code of the Republic of Azerbaijan. 1.2. These Regulations shall regulate the procedure for calculating the maturity of mortgage bonds and mortgage loans included in the mortgage collateral by the method of weighted average.
- Calculation of maturity of mortgage bonds and mortgage loans included in the mortgage collateral by the method of weighted average 2.1. The maturity of mortgage bonds shall be calculated by the method of weighted average method using the following formula: OM = i=1 Pi t P i OM – maturity of mortgage bonds by the method of weighted average; n – number of payments after the calculation date on the issue amount; n
i - number of the next payment after the calculation date on the issue amount; P - amount of payments after the calculation date on the issue amount; t – period from the calculation date to the maturity date of the bonds (expressed in years). 2.2. The maturity date of mortgage loans included in the mortgage collateral by the weighted average method shall be the sum of the maturity of these loans calculated by the weighted average method. 2.3. The maturity of mortgage loans included in the mortgage collateral shall be calculated by the weighted average method using the following formula: KOMi = Pi t A i KOM – maturity of mortgage loans by weighted average method; P – amount of the mortgage loan; A – outstanding amount of mortgage loans included in the mortgage collateral; i - number of the next payment after the calculation date on the issue amount; t – period from the calculation date to the maturity date of the bonds (expressed in years).