We want to find the credit spread for a 3-year CDS where payments are made annually and default, if it occurs, occurs mid-year. The probability of a reference entity defaulting during any given year (conditional on no default during previous years) is 3%. The risk-free rate (LIBOR) is 1% per year, continuously compounded. The recovery rate is R = 27%. What is the CDS spread? Use the CDS template. Please report your answer in percent. 3.45% would be 3.45.