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Lakshmi MG (6 Points)
12 November 2017Thanks..
Lakshmi MG (6 Points)
12 November 2017
Gourav Gupta
(Working in CA Firm)
(671 Points)
Replied 12 November 2017
Divakar
(Student CA Final )
(11857 Points)
Replied 12 November 2017
Kushal
(Kolkata)
(25 Points)
Replied 17 January 2018
Please provide the solution to this problem:
Companies A and B have been offered the following rates per annum on a $20million five year loan:
Fixed Rate Floating Rate
Company A 12.0% LIBOR+0.1%
Company B 12.5% LIBOR+0.6%
Company A requires a Floating rate loan and company B requires a fixed rate loan. Design a swap that will net a bank acting as an intermediary, 0.1% per annum and will be equally attractive to both companies. If company B is offered 13.4% instead of 12.5% fixed, how does your answer change?
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