A German company that has issued floating-rate notes now believes that interest rates will rise. It decides to protect itself against this possibility by entering into an interest rate swap with a dealer. In this swap, the notional principal is 25 million and the company will pay a fixed rate of 5.5 percent and receive Euribor. The current Euribor is 5 percent

Calculate the first payment and indicate which party pays which. Assume that floating-rate payments will be made on the basis of 90/360 and fixed-rate payments will be made on the basis of 90/365.