Assume that X (needs to borrow fixed) is offered 4% fixed rate and LIBOR + 1.5% float, while Y (needs to

borrow float) is offered 6.25% fixed and LIBOR + 2.5% float. You need to structure a swap whereby X

benefits 60% of the savings and Y benefits 40% of the savings of their borrowing costs (did I mention a

bank? then NO need for it). To solve the question, fill in the following table:

X Y

Issue

Pay to the other

Receive

Net