Ossie Ltd is about to establish a new funding arrangement. It is able to borrow in either the fixed-rate or floating-rate debt markets. The company wishes to lower its cost of borrowing by entering into a swap transaction with Battler Ltd. Based on the following data for the two companies, in which interest rate market will Ossie Ltd borrow, and swap into?

	Fixed rate	Floating rate
Ossie Ltd	10.8% per annum	BBSW + 0.3% per annum
Battler Ltd	11.5% per annum	BBSW + 1.7% per annum

Select one:

a. Borrow at fixed interest rate; swap into floating rate

b. Borrow at floating interest rate; swap into fixed rate

c. Borrow at fixed interest rate; no advantage in swap transaction

d. Borrow at floating interest rate; no advantage in swap transaction