During November and December, Logistea entered into new interest derivatives for a nominal amount of SEK 800 million with an average interest rate of 2.15 percent. The average fixed interest term has increased from 0.7 years to 2.2 years. As a result, the proportion of interest-secured debt has increased from 20 percent to just over 50 percent of total borrowing.
The implemented measures significantly reduce Logistea’s interest rate risk. The restructured derivatives portfolio gives Logistea better protection against rising interest rates, longer fixed interest term and lower average interest given current market interest rates and the market’s current yield curve.
The combined effect of the measures also lowers the average financing cost, compared to the current interest rate, by 0.2 percentage points.
Logistea has entered into new interest derivatives for a nominal amount of a total of SEK 800 million with an average interest rate of 2.15 percent. An interest rate swap for a nominal amount of SEK 100 million with a term of 2 years has been entered into. In addition, Logistea has also signed performance swaps for a nominal amount of a total of SEK 700 million with an average maturity of just over five years and an average barrier level of 3.75 percent.
The fixed interest rate is paid as long as the 3-month Stibor is below the respective barrier level at each given interest rate period. Should the 3-month Stibor be at or above the respective barrier level before a new interest rate setting period, then the interest rate hedge for that interest period expires and Logistea pays the 3-month Stibor until the 3-month Stibor falls below the barrier level again and then Logistea again pays the fixed interest rate in current performance swap.
In addition to the newly signed derivatives above, existing interest derivatives totaling SEK 108 million in nominal amount with shorter remaining maturity and excess values of approximately SEK 2 million during the month of November were redeemed early.
“These measures significantly increase the company’s interest hedging while strengthening Logistea’s financial position and lowering our current average interest rate,” said Tobias Lövstedt, COO, Logistea.