Companies A and B have been offered the following rates per annum on a $20 million...
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Companies A and B have been offered the following rates per annum on a $20 million 5- year loan: Fixed Rate Floating Rate Company A 5.0% SOFR + 0.1% Company B 6.4% SOFR + 0.6% Company A requires a floating-rate loan; Company B requires a fixed-rate loan. Design a swap that will net a bank, acting as intermediary, 0.1% per annum and that will appear equally attractive to both companies. Companies A and B have been offered the following rates per annum on a $20 million 5- year loan: Fixed Rate Floating Rate Company A 5.0% SOFR + 0.1% Company B 6.4% SOFR + 0.6% Company A requires a floating-rate loan; Company B requires a fixed-rate loan. Design a swap that will net a bank, acting as intermediary, 0.1% per annum and that will appear equally attractive to both companies.
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