Steelers & Penguins Sports Clubs both seek the lowest financing cost. They face the following rates:

Steelers Penguins

Credit Rating A BBB

Cost of fixed funds 4.0% 5.5%

Cost of floating funds 6 MO Libor + 1.00% 6 MO Libor + 1.75%

If a swap is set up such that any potential savings are divided equally between the two clubs, what will be the net post swap cost for Steelers?

	a.	Libor + 0.625
	b.	4.75%
	c.	3.625%
	d.	Libor 0.375