Reseau Ferre de France, the French railway network, has entered a cross-currency swap on a GBP50 million (USD78.16 million) tranche of a recent GBP350 million 50-year bond offering, to convert the proceeds into euros. Vincent Gaillard, responsible for funding in Paris, said the agency entered the swap because it does not keep any currency exposure in sterling. RFF is an active issuer in the sterling market because there is more pension fund demand for long-dated paper in the U.K. compared with France. He declined to disclose the exchange rate for the swap. Reseau Ferre de France has funding needs of EUR1.2-1.5 billion in 2003, but Gaillard declined to specify how much of that would be issued in sterling--although he said since its creation in 1997, sterling has accounted for one-third of its issuance.
HSBC is the counterparty on the swap and was chosen because of favorable pricing and also because it was the lead manager on the bond deal, Gaillard said.
