Bank AAA is able to borrow at a variable rate of Libor + 4% or at fixed rate of 7%. Bank BBB is able to borrow at a variable rate of Libor + 6.0% or at a fixed rate of 8.0%. Explain how a swap is feasible between the banks and show with a diagram the flow of interest rate payments between the banks and their respective lenders under the swap arrangement. [7]