Magellan Midstream Partners, a U.S.-based petroleum producer, has entered interest-rate swaps to convert fixed debt into synthetic floating-rate liabilities following a recent debt refinancing. Paula Farrell, director of investor relations in Tulsa, Okla., said the energy corporate converted USD250 million of fixed-rate debt to floating in order to balance its fixed- and floating- liability mix.
Magellan previously had a mixture of floating-rate and fixed-rate debt, however a recent refinancing resulted in 100% fixed-rate liabilities, she said. The corporate's interest rate exposures now stands at around 55% fixed and 45% floating. Magellan's refinancing of debt, combined with its interest-rate swap agreements, has also allowed the corporate to reduce its interest expenses, she added.
