Question
Company A and B have been offered the following rates per annum on a $20 million five year loan: Fixed rate Floating rate Company A
Company A and B have been offered the following rates per annum on a $20 million five year loan:
| Fixed rate | Floating rate | |
| Company A | 5.5% | LIBOR + 1% |
| Company B | 6.25% | LIBOR + 1.25% |
Company A requires a floating-rate loan; company B requires a fixed-rate loan. Design a swap that will appear equally attractive to both companies.
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Financial Times Handbook Of Corporate Finance A Business Companion To Financial Markets Decisions And Techniques
Authors: Glen Arnold
2nd Edition
0273726560, 978-0273726562
