Eksportfinans, the Norwegian export credit agency, has entered an interest rate swap to convert a USD750 million bond offering into a floating-rate liability. Soren Elbech, head of funding and investor relations in Oslo, said the agency converts all of its fixed-rate debt to floating in order to maintain its AAA rating. "It is a hedging exercise," he explained. Elbech would not disclose what the agency is paying and receiving in the swap. The bond has a coupon of 3.875%.
The export credit agency takes a conservative approach to selecting counterparties, evaluating them on a case-by-case basis and requiring a minimum rating of single A.
Eksportfinans opportunistically issues in currencies other than its main lending currencies and then uses foreign exchange swaps to convert the proceeds into either U.S. dollars, Norwegian krone or euros, Elbech added. The agency does this to save on funding costs, he noted.
