ABC Company and XYZ Company need to raise funds to pay for capital improvements at their manufacturing plants. ABC Company is a well-established firm with an excellent credit rating in the debt market; it can borrow funds either at 11 percent fixed rate or at LIBOR + 1 percent floating rate. XYZ Company is a fledgling start-up firm without a strong credit history. It can borrow funds either at 10 percent fixed rate or LIBOR + 3 percent floating rate.

If the amount each firm wants to borrow is 100,000,000 payable back in 3 years, can you describe how would you attempt to price the swap for the floating-rate payer firm? What other information you would need for pricing the swap? (Please give answers by expaination, not just a table)