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Derivatives

Thai Oil Corp Eyes Interest-Rate Swap

Bangkok-based Bangchak Petroleum is looking to enter interest-rate swaps to hedge exposure on new debt. Wanapa Imachai, treasurer, said it will look to pay fixed and receive floating to cover floating-rate bonds and loans. She declined comment on the size of the swap and the rates it will aim to pay and receive. But, she explained it plans to convert part of a THB5 billion (USD111 million) floating-rate bond and approximately USD30 million of its USD500 million liabilities portfolio--largely loans--to hedge against possible rate rises.

Imachai said the most important consideration in choosing counterparties is pricing. The corporate has not spoken to possible counterparties for the swap, she added. Bangchak also uses currency swaps to hedge foreign exchange risk.