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What is the effective interest cost for the first year

Problem:

Gas du Ancy, a European natural gas company, is borrowing US$650 million via a Syndicated Eurocredit for six years at 80 basis points over LIBOR. LIBOR for the loan will be reset every six months. The funds will be provided by a syndicate of eight leading investment banks, which will charge up-front fees totaling 1.2% of the principal amount. What is the effective interest cost for the first year if LIBOR is 8.00% for the first 6 months and 7.00% for the second 6 months?

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Finance Basics: What is the effective interest cost for the first year

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