The finance director of S&U Plc is worried that interest rates are likely to rise over the medium term. She is particularly worried as most of S&U's debt pays interest based upon LIBOR S&U is looking to swap the interest obligations on 200 million of its 15 year floating rate debt for an equivalent 15 year 200 million of fixed rate debt. A swap bank has identified a possible swap partner in Altona. Details of the interest rates both companies would have to pay in the cash market are as follows: Variable Rate Fixed Rate S&U LIBOR + 1% 6% Altona LIBOR + 3% 7% The swap bank has agreed to arrange the swap for a fee equivalent of 0.05% per year of the total amount swapped. The remainder of the balance is shared between the two companies with 0.05% in favour of the company that has the absolute advantage. Required: Devise a swap that would be beneficial to both S&U and Altona. Give details of how much interest each party will save per year as a result of the interest rate swap and the conditions needed for a swap to be successful