Galifre Educational has a $75 million, 10 years to maturity, floating rate bond outstanding. The interest rate adjusts every June 15 and December 15 at the annual rate of Libor + 40 basis points. Galifre Educational has entered into a swap agreement in which the company receives Libor + 45 basis points every June 15 and December 15 and pays 11.875 every June 15 and December 15 on a notional principal amount of $75 million.
The net interest payment Galifre Educational must make June 15 is....