CADES, a French public agency, plans to use interest rate and foreign exchange swaps on a portion of its EUR3 billion (USD3.1267 billion) funding requirement for this year. CADES Chairman Patrice Ract Madoux in Paris said it is too early to tell how much of the issuance the agency would convert, but said CADES uses interest rate swaps to convert fixed-rate offerings into floating rate liabilities and fx swaps to convert any non-euro EMTNs into its home currency.
Last year the agency issued EMTNs in non-euro currencies such as U.S., Hong Kong and Aussie dollars as well as yen and Norwegian krone. In total these amounted to approximately 12-13% of its funding. Madoux said this year's figure will depend upon demand from investors. Madoux said the agency uses an asset-liabilities model that determines how much of the agency's fixed-rate debt should be converted into floating-rate. He said, however, if CADES issues benchmarks--which need to be at least EUR1 billion--the agency will issue them with fixed rates.
