Company Z wishes to borrow $50 million for 10 years at a fixed rate of interest.

Two alternative approaches are being considered:

   A. Issue a 10 year bond at a fixed rate of 6%, or

   B. Borrow from the bank at Libor +2.5% for a 10 year period and simultaneously enter into a 10 year interest rate swap.

Current 10 year swap rates against Libor are 4.0% - 4.2%.

What is the difference in the net interest cost between the two alternative approaches?