Oesterreichische Kontrollbank, the Austrian export credit agency, has entered an interest rate swap on a USD1 billion bond offering to convert it into a floating-rate liability. Ebner Anton, deputy head of treasury at the agency in Strauchgasse, said its policy is to convert fixed-rate debt into floating-rate. The firm chose to keep the proceeds of the offering in U.S. dollars, however, because it has dollar assets, Anton added. He noted that it is typical for the export agency to issue bonds in greenbacks a few times per year. The tenure of the swap matches the five-year maturity of the bond.
In the swap, the export agency pays LIBOR minus a spread in the mid-teens and receives the 2.375% coupon on the bond, Anton noted. He would not reveal the swap counterparty, but said that it is the agency's policy to require collateral agreements to be in place with potential counterparties and for them to have a rating of at least AA.
The agency has approximately EUR4 billion (USD4.74 billion) in funding needs this year and has already raised EUR1.5 billion. Anton said the agency would be likely to use interest rate swaps for any further bond offerings. JPMorgan and UBS Warburg were the lead managers on the bond deal.
