A company raised fixed rate bank finance together with an interest rate swap for the same term and same principal value to pay floating receive fixed rate interest on an annual basis.
Which THREE of the following statements are correct?
A.
The company has effectively obtained floating rate debt.
B.
On the first day of this arrangement, the company receives the principal borrowed from the bank and pays this across to the swap counterparty.
C.
LIBID (London Interbank Bid Rate) is normally used as the reference rate for determining interest due under the swap.
D.
Under the swap, interest is exchanged every year.
E.
The swap contract is normally a contract between a company and a bank.
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