Transnet enters contract for USD 9 million cross-currency interest rate swap with China Development Bank

According to the annual Financial Statement of Transnet in 2019, as of March 31, 2019, South African state-owned transportation company Transnet was party to a cross-currency interest rate swap for USD 9 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 + 3.84%, and the hedge interest rate receivable by Transnet was 3-month LIBOR + 2.57%. As calculated from the Johannesburg Stock Exchange, the average 3-month JIBAR over 2019 was 4.76%, so at the time of signing the hedge interest rate payable was 8.6%. In this time period, the average 3-month LIBOR over 2019 was 2.327%, so at the time of signing the hedge interest rate receivable was 4.897%. Payments on the loan would be made 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

Time of signing for the swap is unknown, coder used 3M average monthly 2019 JIBAR and LIBOR. The Annual Financial Report for 2019 differs from the 2020 report in reporting the loan to have a nominal value of 10 million USD instead of 9 million; the latter is used as it was a more recent source.

Number of official sources

2

Number of total sources

2