First International Computer, a computer manufacturer in Taiwan, is considering entering interest-rate swaps to convert its floating-rate loans into synthetic fixed-rate liabilities. "We're getting quotes from banks," said Amanda Hung, manager of the finance department in Taipei, noting that the firm is looking to hedge TWD2 billion (USD58.1 million) of three and five-year loans issued--via syndication--in December and March. In the swaps FIC will pay a fixed-rate and receive floating, but Hung declined comment on specific rates.
Hung said the technology firm will look to convert its liabilities into fixed because the interest rates in Taiwan are not likely to remain low.
Additionally, Hung noted that FIC will increase the size of its TWD23 billion loan book this summer, though she declined to elaborate on the potential size of the loan. "We'll finish another syndication in July," she added, continuing that the loans will likely also be issued as floating rate and converted to a fixed-rate. The corporate is speaking with potential counterparties for the swaps. "Both foreign and domestic banks have the facilities for such transactions," she added, singling out Credit Lyonnais and TAIPEIBANK. Max Shyu, head of interest-rate trading at Lyonnais in Taipei, and officials at TAIPEIBANK declined comment.
