B before the swap, the interest payable by company a is: 20 million *( LIBOR+0.25%).
The interest payable by Company A is: 20 million * 10%.
After the swap, the interest payable by Company A is: 20 million *( LIBOR+0.75%).
The interest payable by Company A is: 20 million *9%.
Overall reduction of financing cost after swap;
10%+ LIBOR +0.25%-(9%+ LIBOR +0.75%)=0.5%
C the fixed interest rate of Party A's loan to Party B is I,
Company B's direct loan has a fixed interest rate of 10%, so I must first meet the following conditions: I
Secondly, Company A cannot lose money in interest rate swap.
Then I-9% >; = LIBOR +0.75%- LIBOR +0.25%
To sum up, 9.5% is calculated.