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Calculate effective fixed rate on synthetic fixed-rate loan

Problem:

A company has a variable-rate loan with a bank paying LIBOR plus 65. The company wishes to create a synthetic fixed-rate loan and enters into an interest rate swap paying a swap fixed rate of 9 percent and receives LIBOR. The company also pays an annual swap spread of 35 basis points to the swap dealer. Calculate the effective fixed rate on the synthetic fixed-rate loan.

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Finance Basics: Calculate effective fixed rate on synthetic fixed-rate loan

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Finance Basics: Calculate effective fixed rate on synthetic fixed-rate loan

Reference No:- TGS02039952

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