Réseau Ferré de France, which owns the infrastructure of the French railroad, has entered a cross-currency interest rate swap on a recent 32-year GBP50 million (USD83 million) bond. In the swap, the government agency receives the 5.2% coupon on the bond and pays fixed-rate euros. The official said the maturity of the swap matches that of the bond.
The company issued sterling-dominated debt despite having all its liabilities in euros because sterling is one of the most stable markets for long-dated bonds, noted a company official. He said the company would continue to use the sterling bond market for this purpose and enter further interest-rate swaps.
The bond is fungible with a GBP175 million issued in 2001, which it has already converted.