Alpha and Beta Companies can borrow for a five-year term at the following rates: Alpha Beta Moodys credit rating Aa Baa Fixed-rate borrowing cost 11.8 % 14.6 % Floating-rate borrowing cost LIBOR LIBOR + 1 % Assuming more realistically that a swap bank is involved as an intermediary.

Assume the swap bank is quoting five-year dollar interest rate swaps at 13.312.1 percent against LIBOR flat.

Calculate the quality spread differential (QSD). (Enter your answers as a percent rounded to 1 decimal places.)