Companies AAACorp and BBBCorp have been offered the following rates per annum on a $10 million five-year loan:
Fixed rate Floating rate
AAA Corp 4.0% LIBOR - 0.1%
BBB Corp 5.2% LIBOR - 0.6%
Design an interest rate swap that will make all parties involved (bank, two companies) attractive assuming that BBBCorp wants to borrow at a fixed rate of interest, whereas AAACorp wants to borrow at a flotation rate of interest linked to six-month LIBOR.