Oil and gas producer Devon Energy has entered an interest-rate swap to convert a fixed-rate USD500 million note issue into a synthetic floater. Brian Engel, spokesman in Oklahoma City, explained that the corporate is able to reduce its interest rate costs by 1.15% via the swap. This, in turn, creates savings of USD5.75 million for the company.
In the swap, which mirrors the three-year maturity of the notes, Devon receives the 1.75% coupon and pays LIBOR minus 27 basis points, said Engel. UBS lead managed the note sale and is the counterparty on the swap