Italian construction company Astaldi is planning to enter an interest-rate swap to convert the euro proceeds from a recent fixed-rate bond offering into a floating-rate liability. Giorgio Bianchini, head of finance in Rome, said the company is likely to convert a portion of the EUR150 million (USD132 million) deal, which was priced earlier this month, into floating. He said the company will leave between a third and half of the EUR150 million issue in fixed-rate.
In the swap, Astaldi will receive the three-year 6.50% coupon on the bond and pay a three-year floating rate. It is in negotiations with IntesaBci, which led the bond sale, over whether to enter a plain-vanilla swap at a rate over three-month Euribor or LIBOR, or to use a combination of both floating-rate benchmarks. "I would like to have part Euribor, part LIBOR so we can diversify the risk," Bianchini said. He declined to say how much the company will seek to pay over the benchmarks as it is still negotiating the terms of the swap.
The swap will be executed with IntesaBci because Astaldi uses it in other areas, such as project finance.