Please, explain thw answer.

A bank enters into a 3-year swap with company X where it pays LIBOR and receives 3%. Bank also enters into an offsetting swap with company Y where it receives LIBOR and pays 2.95%. Which of the following is true? If company X defaults, the swap with company Y is null and void. If company X defaults, the bank will be able to replace company X at no cost. If company X defaults, the swap with company Y continues. The bank's bid-offer spread is 0.5 basis points None of the above