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Derivatives

FirstGroup Converts GBP250 Million Note

FirstGroup, a U.K. transport company, has entered interest rate and currency swaps on a GBP250 million (USD441 million) note to convert it into a dollar liability. "The fundamentals of the sterling bond market offered good value on relative terms to the company" said Ian Weldon, group treasurer in Aberdeen. Weldon declined to detail what FirstGroup pays and receives in the swap.

"The basic rationale for the transfer was to reduce refinancing risk for the group," he added.

FirstGroup has a rating of BBB and the coupon is 6.125%.

Cazenove, HSBC and the Royal Bank of Scotland were the bookrunners.

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