Company AAA ( higher rated, more creditworthy) and company BBB ( lower rated) have offered the following rates per annum on a $10 million 4 year loan.

Fixed rate Floating rate

AAA 6% LIBOR + 0.4%

BBB 7.8% LIBOR + 0.9%

In order to hedge their interest rate risk, company AAA requires a floating rate loan, and BBB requires a fixed rate loan. Design a swap (indicate the net interest rates paid by each party with the swap arrangement) that is equally attractive to both companies, after considering a bank charges a fee of 0.3% per annum for acting as an intermediary in the swap arrangement.