NationsRent, an equipment rental agency, is considering converting a recent USD225 million fixed-rate bond into a synthetic floater. John Scherer, treasurer in Fort Lauderdale, Fla., said it may enter a swap as a means of obtaining better yield from the debt. The huge number of homeowners refinancing their mortgages has caused mortgage firms to enter swaps pushing out spreads and making it more advantageous for corporates to hedge bond issues (DW, 9/4).
The decision on whether to pull the trigger will depend on what swap rate NationsRent is able to obtain, said Scherer, declining to specify the corporate's ambitions. Should NationsRent go ahead with any swap it will select the counterparty from five-firms that provide a credit facility, said Scherer. He declined to name the firms.
Jefferies & Co. and Wachovia Securities lead managed the seven-year bond sale.
