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Sir this question really confused my understanding on swaps.
own borrowing is that Sembilan has floating Y+0.6
Bank will be 3.7625then when they swap Sembilan pays 3.7625
bank Y+0.6Am not getting how we get the end results stated in the Kit.
Secondly how was the fee of 0.64 arrived at?
They pay Y + 0.6 on the borrowing
They receive from the counterparty Y
They pay the counterparty 3.7625
They pay fees of 0.2So the end result is Y + 0.6 – Y + 3.7625 + 0.2 = 4.5625
They are borrowing $320M and therefore the fee is 0.20% x 320M = $0.64M
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