Cromwell Extends Interest Rate Hedging
25/05/2010
Property and funds manager Cromwell Group (ASX:CMW) advised today that it has taken advantage
of recent market volatility to enter into further short term interest rate hedges. The Group has
recently entered into:
- A vanilla interest rate cap for $300 million at 4.75% for one year commencing July 2010; and
- A vanilla interest rate swap for $200 million at 4.75% for two years commencing May 2010.
These hedges, when combined with existing swaps already in place mean the Group is now 92% hedged for FY11 based on current drawn debt. The weighted average hedge rates for FY11 and FY12 are 4.98% and 5.24% respectively.
The Group’s weighted average hedge term is now 1.9 years, and reflects the Group’s policy of
ensuring substantial hedging over a 1-2 year period, whilst maintaining some flexibility to extend the profile further if market rates present value.
Cromwell Treasurer David Gippel commented, “Recent events in world markets presented us with an opportunity to expand our hedging profile at the short end of the interest rate curve at minimal cost and we have moved quickly to take advantage of that. We continue to actively monitor markets and may extend the profile out further in the future if we believe market pricing in the 3-5 year range moves closer to what we consider to be attractive levels.”
Hedges
Weighted Average Hedge Rate
Further detail regarding the Group’s debt facilities was contained in the 31 December 2009 Half Year Results presentation and announcement.