Dear Sir
Why under Swap
Lurgshall borrow at (labor+0.5%) where Counterparty choose 6.1% why not same as (libor+1.5%)
Ask the Tutor ACCA AFM
2019 March/June 2(a)
6y ago#1I am not quite sure as to what it is that is worrying you.
The whole purpose of a swap is to change fixed rate borrowing into floating rate borrowing (or vice versa) by finding a counterpart who wishes to swap the opposite way (provided obviously that it does result in an overall saving). So having both parties borrowing at floating rate will achieve nothing.
Have you watched my free lectures on swaps?
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