Transnet signs contract for USD 32 million cross-currency interest rate swap with China Development Bank

According to the annual Financial Statement of Transnet in 2018, as of March 31, 2018, South African state-owned transportation company Transnet was party to a cross-currency interest rate swap for USD 32 million with the China Development Bank (CDB). In this transaction, both parties simultaneously loaned to each other but at different interest rates. The hedge interest rate payable by Transnet was 3-month JIBAR + 3.775%, and the hedge interest rate receivable by Transnet was 3-month LIBOR + 2.57%. According to the Johannesburg Stock Exchange, the average 3-month monthly JIBAR rate over 2018 was 4.82%, so at the time of signing the hedge interest rate payable was 8.595%. In this time period, the average 3-month LIBOR rate over 2018 was 2.307%, so at the time of signing the hedge interest rate receivable was 4.877%. The cash flows are projected to occur quarterly until June 12, 2030. The JPMorgan Chase Bank branch in Johannesburg will act as the hedge counterparty to hedge against interest liabilities.

Additional details

The time that the swap took place is unknown, so coder used the average 3M JIBAR rate for 2018 to calculate hedge interest rate payable, and the average 3M LIBOR rate for 2018 to calculate hedge interest rate receivable.

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3

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3