Assume that you have an outstanding 100M loan with your bank under which you pay 5% fixed rate. Assume also that you have entered into a swap agreement for a notional of 100M USD under which every 6 months you agree to pay LIBOR and receive 4% fixed. On the date you signed the contract LIBOR is 3%. The exchange of payments under the swap have the effect of modifying your liabilities so that

A. you end up having a loan that costs 4% fixed rate

B. you end up having a loan that costs 6% fixed rate

C. you end up having a loan that costs LIBOR+100bps floating rate

D. you end up having a loan that costs LIBOR-100bps floating rate

Asnwer is C, please list detailed solution