Petrol Ibrico, a European gas company, is borrowing US$650,000,000 via a syndicated eurocredit for 6 years at 80 basis points over LIBOR. LIBOR for the loan will be reset every six months. The funds will be provided by a syndicate of eight leading investment bankers, which will charge up-front fees totaling 1.21% of the principal amount. What is the effective interest cost for the first year if LIBOR is 4.42% for the first six months and 4.05% for the second six months?

NOTE: ANSWER WITH TWO DECIMALS PLACES