German development bank KfW has entered an interest rate swap to convert a recent fixed-rate bond offering into a synthetic floating-rate liability. The firm entered the fixed-to-floating swap on the back of a GBP100 million (USD156 million) bond sale, said Frank Czichowski, first v.p. and head of credit markets in Frankfurt. The swap was executed to hedge interest rate risk on the bond.
Czichowski declined to detail the terms of the swap, which mirrors the maturity of the four-year bond, or name the swap counterparty. Barclays Capital and Merrill Lynch lead managed the bond.
