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. Hint: Your swap should look like the swap described in slide #20 in Chapter 7 PowerPoint 4.33% 4.37% 4% Floating+0.6% AAACorp F.I. BBBCorp Floating Floating 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. Hint: Your swap should look like the swap described in slide #20 in Chapter 7 PowerPoint 4.33% 4.37% 4% Floating+0.6% AAACorp F.I. BBBCorp Floating Floating
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