A favorable move in the sterling interest rate swap curve helped U.K. utility ScottishPower seal a GBP317 million (USD582 million) acquisition of a power plant in England.
The utility's original offer, filed at the turn of the year, was stymied, in part, by the need to unwind a long-dated out-of-the-money interest rate swap hedging the plant's some GBP350 million of floating-rate project debt.
Since January, however, the negative value of the derivative contract to the plant's balance sheet, has fallen from GBP22 million to GBP14 million, according to a financier close to the deal. The syndicate of banks is set to unwind the swap.
