A commercial bank borrowed five-year money from a regional Federal Home Loan Bank at a quarterly payment, floating-rate of interest equal to three-month LIBOR+0.2%. The bank then entered a medium-term interest rate swap with a fixed-pay position. The quarterly reset swap required the bank to pay 1.2% fixed and receive LIBOR. How did the swap change the repricing characteristics (i.e, fixed v. floating) and the cost of its liability hedged? Why would the bank have entered the swap? LIBOR was about 0.3% when the swap was established versus approximately 1.5% a year later.