Transnet signs contract for USD 22 million cross-currency interest rate swap with China Development Bank

According to the annual Financial Statement of Transnet in 2016, as of March 31, 2016, South African state-owned transportation company Transnet was party to a cross-currency interest rate swap for USD 22 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 + 4.295%, 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 2016 was 4.93%, so at the time of signing the hedge interest rate payable was 9.225%. In this time period, the average 6-month LIBOR over 2016 was 1.056%, so at the time of signing the hedge interest rate receivable was 3.626%. Payments on the loan would be made quarterly until June 2030.

Additional details

the time that the swap took place is unknown, so coder used the average 3M JIBAR rate for 2016 to calculate hedge interest rate payable, and the average 6M LIBOR rate for 2016 to calculate hedge interest rate receivable.

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