A British MNC needs to raise 132 million Swiss Francs (SF) to finance a project in Switzerland. The company can either issue a fixed rate SF denominated bond or a fixed rate bond in British Pounds (BP) and exchange the proceeds for SF which creates possible currency exposure. The current exchange rate is BP = 1.32 SF. A Swiss MNC needs to raise 100 million BP to finance a project in Britain. The company could either issue a fixed rate BP denominated bond or a fixed rate bond in SF and exchange the proceeds for BP, also creating possible currency exposure. The companies face the following market interest rates. BP Bond Market SF Bond Market British MNC 10% 11% Swiss MNC 11.50% 11.75% A swap bank dealer has agreed to organize a currency swap among the MNCs charging 94% fees to structure this transaction. What is the size of the Quality Spread Differential (QSD) involving the two MNCs? What does it capture? Organize a swap agreement between the two MNCs