Task 2 Companies A and B can borrow for a five-year term at the following rates: Company A Company B Credit rating Baa Fixed rate borrowing cost 10,5% 12% Floating rate borrowing cost LIBOR LIBOR+1% Develop an interest rate swap in which both Company A and Company B have an equal cost savings in their borrowing costs. Assume Company A desires floating-rate debt (but available fixed) and Company B desires fixed-rate debt (but available floating). Swap bank is quoting five-year dollar interest rate swaps at 10.7% (Aa credit rating) and 10.8% (Baa rating) against LIBOR flat. Task 2 Companies A and B can borrow for a five-year term at the following rates: Company A Company B Credit rating Baa Fixed rate borrowing cost 10,5% 12% Floating rate borrowing cost LIBOR LIBOR+1% Develop an interest rate swap in which both Company A and Company B have an equal cost savings in their borrowing costs. Assume Company A desires floating-rate debt (but available fixed) and Company B desires fixed-rate debt (but available floating). Swap bank is quoting five-year dollar interest rate swaps at 10.7% (Aa credit rating) and 10.8% (Baa rating) against LIBOR flat