Berli Jucker Public Co., a Bangkok-based manufacturer with divisions focusing on glass, consumer products and imaging, entered a three-year THB1.25 billion (USD28 million) interest-rate swap earlier this month to convert a fixed-rate loan into a synthetic floating-rate liability.
In the swap the company pays the floating Thai baht swap rate plus a margin and receives fixed at 6%, said Suvat Suebfantikul, group treasurer. Currently the floating rate stands at 2.81%, noted a trader in Bangkok. HSBC is the counterparty and was chosen for its pricing and relationship. Berli Jucker elected to hedge the loan because it forecasts Thai interest-rates to fall in the coming months. The loan was used to refinance outstanding debt.
Berli Jucker has a long-term debt portfolio of THB2.05 billion. Suebfantikul said it has used cross-currency interest-rate swap and U.S. dollar-denominated knockout interest-rate options in previous years to hedge its loan book.
Berli Jucker is a subsidiary of First Pacific, a Hong Kong-based investment and management company. Vinh Tran, spokeswoman at HSBC in Hong Kong, did not return calls.
