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Caltex To Reenter Swap Mart

30 Mar 2003

Caltex Australia, Australia's largest oil refining and distribution company with assets of over AUD3 billion (USD1.78 billion), is looking to tap the interest rate swap market. "We're seeking to extend [the maturity of] our swaps," said Seong Lim, treasury manager in Sydney, noting that the firm is looking to roll over about AUD100-200 million in two and three-year interest rate swaps within the next six months. "We think rates will hold," he added. The company is looking to maintain its level of hedging 50% of its outstanding liability book via synthetic fixed positions. In the swaps, Caltex will pay fixed and receive the six-month floating bank bill rate, said Lim.

"We always use the same cast," Lim said, explaining that potential counterparties consist of the corporate's relationship bankers: Commonwealth Bank of Australia, Deutsche Bank, National Australia Bank and Westpac Banking Corp. Lim added that Caltex sets up panel for swap transactions and looks for the lowest pricing among its bankers.

30 Mar 2003