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Carlsberg Soaks Up Rate Risk

Carlsberg Breweries has entered interest-rate swaps to convert a recent EUR500 million (USD494 million) bond offering into floating-rate debt. Lars Cordi, treasury manager in Copenhagen, Denmark, said the coupon on the bond is 5.625%. Carlsberg then entered a swap to convert the offering to floating-rate debt at a spread over six-month Euribor, said Cordi, declining to give the exact spread.

Cordi said the company, in general, considers floating-rate debt less risky than fixed-rate. He would not disclose the counterparty on the interest-rate swap. But he explained that the company uses a group of relationship banks--which he declined to name--to transact all of its capital markets activity, including interest-rate swaps. Citibank/Schroder Salomon Smith Barney, Deutsche Bank and Nordea were the underwriters on the transaction.

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