Zippen Industries has a $75 million, 10 years to maturity, floating rate bond outstanding. The interest rate adjusts every January 15 and July 15 at the annual rate of Libor + 100 basis points. Zippen Industries has entered into a swap agreement in which the company receives Libor + 5 basis points every January 15 and July 15 and pays 12.625 every January 15 and July 15 on a notional principal amount of $75 million.
The net interest payment Zippen Industries must make January 15 is