. Phillip's Screwdriver Company has borrowed $44 million from a bank at a floating interest rate of 2 percentage points above three-month Treasury bills, which yielded 7%. Assume that interest payments are made quarterly and that the entire principal of the loan is repaid after five years.

Phillip's wants to convert the bank loan to fixed-rate debt. It could have issued a fixed-rate five-year note at a yield to maturity of 11%. Such a note would now trade at par. The five-year Treasury bills yield to maturity is now 9%.

. Phillip's Screwdriver Company has borrowed $44 million from a bank at a floating interest rate of 2 percentage points above three-month Treasury bills, which yielded 7%. Assume that interest payments are made quarterly and that the entire principal of the loan is repaid after five years.

Phillip's wants to convert the bank loan to fixed-rate debt. It could have issued a fixed-rate five-year note at a yield to maturity of 11%. Such a note would now trade at par. The five-year Treasury bills yield to maturity is now 9%.

One year from now, what net swap payment will Phillip's make or receive?