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A company has been traditionally borrowing floating funds at a spread of 15 bp over 6-month LIBOR from its bankers. It finds that it can

A company has been traditionally borrowing floating funds at a spread of 15 bp over 6-month LIBOR from its bankers. It finds that it can issue 5-year fixed rate bonds at 35bp over treasuries which are yielding 8.20%. Fixed to floating swaps are trading at 65bp over treasuries versus LIBOR. Show how the company can reduce the cost of its floating rate funding.

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