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Computing effective fixed rate on synthetic fixed-rate loan

Question: 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% and receives LIBOR. The company also pays an annual swap spread of 35 base points to the swap dealer. Calculate the effective fixed rate on the synthetic fixed-rate loan.

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

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

Reference No:- TGS02086165

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