Why counterpaty A & B use such normal funding cost &net cost after swap,also confused about the diagram,why A transfer 11.5% to B.

Pls explain in details,thanks!

Q1 Company A, a low rated firm, desires a fixed rate, long term loan. Company A presently has access to floating interest rate funds at a margin of 2% p.a. overLIBOR. Its direct borrowing cost is 14% p.a. in the fixed rate bond market. In contrast, company B (a higher rated firm than A), which prefers a floating rate loan, has access to fixed rate funds in the Eurodollar bond market at 11.5% p.a. and floating rate funds at LIBOR 0.75% p.a. (a) (3 marks) How can A and B use a swap to advantage? Explain or illustrate very clearly and explicitly. Qi 5 marks answer (a) (3 marks) A B Advantage of B fixed 14% pa. 11.5% pa. 250 LIBOR +2% p.a. LIBOR +0.75% p.a. 125 bp floating net 125 bp normal funding cost net cost after swap differential counterparty A 14% pa 13.5% pa 05% a B LIBOR 0.75% p.a. LIBOR 0.75% p a. counte 11.25% pa 11.5% p a. LIBOR 2% p.a. A B---- 11.5% p.a. LIBOR