6.0% p.a.The company:Borrows from bank P at Libor + 3%Enters a swap with bank Q: pay fixed 4.5%, receive Libor + 1.5%Combine the cash flows:Pay Libor + 3% (loan)Pay 4.5% (swap fixed leg)Receive Libor + 1.5% (swap floating leg)Net cost:(Libor+3%)+4.5%−(Libor+1.5%)=3%+4.5%−1.5%=6.0%(\text{Libor} + 3\%) + 4.5\% - (\text{Libor} + 1.5\%) = 3\% + 4.5\% - 1.5\% = 6.0\%(Libor+3%)+4.5%−(Libor+1.5%)=3%+4.5%−1.5%=6.0% So the hedged borrowing rate is:

6.0% p.a.