Find the floating rate paid by carkosheek enterprises

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Reference no: EM131603355

EIB has arranged to borrow $100 million at a floating rate of LIBOR plus 100 basis points, but EIB would prefer to borrow at a fixed rate of 4.6%. Carkosheek Enterprises has arranged to borrow $100 million at a fixed rate of 4% but would prefer to borrow at a floating rate. Both EIB and Carkosheek Enterprises are aware of a financial institution that will arrange a swap at a cost of 20 basis points (10 basis points to each side) on a pair of offsetting transactions. Find the floating rate paid by Carkosheek Enterprises.

Reference no: EM131603355

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