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Company A is a AAA-rated firm desiring to issue five-year FRNs. It finds that it can issue FRNs at six-month CME Term SOFR + 0.615
Company A is a AAA-rated firm desiring to issue five-year FRNs. It finds that it can issue FRNs at six-month CME Term SOFR + 0.615 percent or at three-month CME Term SOFR + 0.615 percent. Given its asset structure, three-month SOFR is the preferred index. Company B is an A-rated firm that also desires to issue five-year FRNs. It finds it can Issue at six-month CME Term SOFR +1.475 percent or at three-month CME Term SOFR + 1115 percent. Given its asset structure, six-month SOFR is the preferred index. Assume a notional principal of $15,000,000. Required: o. Determine the QSD b. Set up a floating-for-floating rate swop where the swap bank recelves 0.125 percent and the two counterpartles share the remaining savings equally. Calculate the all-tin-cost of borrowing for company A and B. Answer is not complete. Complete this question by entering your answers in the tabs below. Detecmine the QSD. Noter Do not round inte mediate calculations, Enter vour ansuer as a percent rounded to 3 decimal places
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