Alito Inc. has issued bonds that pay SOFR (a floating rate) to investors (in exchange for cash). Roberts Co. has issued bonds with a fixed 7% rate to investors (in exchange for cash), with interest payable semiannually. Alito Inc and Roberts Co. enter into an interest rate swap. In this swap, Alito Inc, will pay a fixed 7% rate to Bank (a financial intermediary); in turn, Bank passes this payment on to Roberts Co. Roberts Co, will pay SOFR to Bank, which in turn passes this payment on to Alito Inc. (Through this interest rate swap transaction, Alito Inc. has essentially converted its payment obligation from a floating to a fixed rate; Roberts Co, has converted its obligation from a fixed to a floating rate)