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

SteelersPenguinsCredit RatingABBB

fixed funds4.0%5.5%

floatingfunds6MO Libor6 MO Libor + 0.50%

If a swap is set up such that any potential savings are divided such that Steelers gain 60% of the possible savings and Penguins gain 40 percent of the savings, what will be the net post swap cost for Steelers?

a.Libor - 0.60%

b.4.6%

c.Libor + 0%

d.3.5%