Several foreign banks, includingStandard Chartered Bank, are pitching for a piece of a multimillion dollar cross currency interest-rate swap that Korean Asset Management Co. (KAMCO) is expected to enter later this year. KAMCO is looking to enter a series of swaps to convert floating rate loans totaling USD1 billion into synthetic Korean won-denominated fixed-rate liabilities, according to swappers in the local market.
The Korean money manager recently entered the first leg of a swap on the loan, with a notional size of some USD80 million, said traders in Seoul and Hong Kong. "It's a huge deal," one trader noted, adding that Kookmin Bank was the counterparty. Officials at KAMCO and Kookmin declined comment.
KAMCO is looking to enter the swaps on a pair of loans from the International Bank for Reconstruction and Development and the Asian Development Bank, traders said. The tenor and interest rate on the loans could not be determined by press time. A local trader said Korean entities are keen to lock in fixed interest rates via the swap market now because interest rates are so low.
