Johnson & Johnson $($JJ$),$ U$.$S$.$ has a AAA credit rating. Apple debt is rated AA and hence faces higher interest rates. Both firms wish to raise $$25$ million for $5$ years; $JJ$ is willing to borrow at a floating rate but will not do a swap unless a floating rate of SOFR $+15BP$ or better can be obtained. JJ would also go for the swap if they could borrow fixed at $7\mathrm{.}90\%.$ Apple wants a fixed rate but cannot afford the $8\mathrm{.}35\%$ cost; Apple is willing to do the swap if they could get $8\mathrm{.}10\%$ fixed, or they would go floating if the variable rate cost could be lowered to SOFR $+120.$ For simplicity, ignore any swap fees.

You are the Citicorp banker, CLEARLY set up the swap deal; inside the arrows indicate the swap payments, whether they are fixed or floating and at what rate; in the square boxes below indicate what $JJ$ and Apple borrow at in the external debt markets then show Citicorp's profit in dollars. Citicorp MUST make a positive net profit and not be at risk if rates move.