China International Marine Containers (Group), one of the world's largest manufacturers of marine containers with over USD795 million in assets, is planning to enter an interest-rate swap on the back of a syndicated loan it is likely to take out within six months. The manufacturer is currently in talks with several firms about a U.S. dollar-denominated loan, likely a LIBOR-based facility for approximately USD20 million, according to Tony Yao, assistant manager of the finance department in Shenzhen. "We're now preparing for a bidder's meeting," said Yao, noting that an interest-rate swap would also be discussed.
CIMC will look to enter the swap on the entire amount, altering the loan from floating into fixed to lock in a low rate when it appears that the interest-rate cutting environment is at an end. Yao added that his ideal range is to pay 3-3.5% fixed while receiving a LIBOR rate that matches the loan.
The most likely maturity of the loan is eight years said Yao, adding that the interest-rate swap will mirror the life of the loan.
Potential counterparties which are bidding for the loan and swap include Standard Chartered Bank, ABN AMRO, ING Barings and Bank of America. "Pricing is everything," noted Yao. Spokesmen at the firms in Hong Kong did not return calls.
