Interest Swap Agreement?

Coatmin’s creditworthiness has been worsening but it has entered into an interest rate swap agreement which acts as a hedge against a $2 million 2% bond issue which matures on 31 May 2016. The notional amount of the swap is $2 million with settlement every 12 months. The start date of the swap was 1 December 2013 and it matures on 31 May 2016. The swap is enacted for nil consideration. Coatmin receives interest at 1·75% a year and pays on the basis of the 12-month LIBOR rate. At inception, Coatmin designates the swap as a hedge in the variability in the fair value of the bond issue. Fair value Fair value 1 December 2013 30 November 2014 $000 $000 Fixed interest bond 2,000 1,910 Interest rate swap Nil 203 Coatmin wishes to know the circumstances in which it can use hedge accounting and needs advice on the use of hedge accounting for the above transactions. How are we going to treat it as per IFRS 9 ???????????