a) ABC Ltd is interested to sell an existing fixed-for-floating interest rate swap to one of its corporate clients. Under the existing swap, ABC Ltd pays 10% pa and receive 3-month LIBOR on a $10 million principal. Cash flows are exchanged every quarter. The swap has a remaining life of 16 months. Data shows that the 3-month LIBOR rate 1 month ago was 11.8% pa; 2 months ago it was 12% pa; 3 months ago it was 12.2% pa and 4 months ago it was 12.3% pa. The relevant discount rate is 12% per annum for all maturities. All rates are compounded quarterly. What is the value of the swap?

b) Will ABC Ltd be receiving or paying the value of the swap in (a)? Elaborate.