ACCA P4 Advanced financial management - Interest rate swaps

I have been working as a financier for 20+ years, but I have never used swaps in my practice. It is a very interesting way to fix financial costs, but Ukrainian banks do not provide such services. I read about the swaps in P4 exam textbook. It seems that P4 examiner also likes the swaps and puts it into exam questions.

The first interest rate swap occurred between IBM and the World Bank in 1981.
However, despite their relative youth, swaps have exploded in popularity. In 1987, the International Swaps and Derivatives Association reported that the swaps market had a total notional value of $865.6 billion. By mid-2006, this figure exceeded $250 trillion, according to the Bank for International Settlements. That's more than 15 times the size of the U.S. public equities market.

Whether a company chooses to borrow fixed or floating, some companies can borrow at better rates than other companies depending on their credit rating.
Because of this, it is potentially (but not always) possible for two companies to swap their borrowings in a way that saves money for both of them.
This is illustrated in the following example (Question 2, ACCA P4, December 2014):

Assume it is 1 December 2014 today and Keshi Co is expecting to borrow $18,000,000 on 1 February 2015 for a period of seven months. It can either borrow the funds at a variable rate of LIBOR plus 40 basis points or a fixed rate of 5·5%. LIBOR is currently 3·8% but Keshi Co feels that this could increase or decrease by 0·5% over the coming months due to increasing uncertainty in the markets.

Rozu Bank has offered Keshi Co a swap on a counterparty variable rate of LIBOR plus 30 basis points or a fixed rate of 4·6%, where Keshi Co receives 70% of any benefits accruing from undertaking the swap, prior to any bank charges. Rozu Bank will charge Keshi Co 10 basis points for the swap.

                    Keshi Co         Rozu Bank's offer    Total
Own                5,5%             Libor + 0,3%           Libor + 5,8%
Swap           Libor + 0,4%         4,6%                   Libor + 5,0%
                                                                          Benefits = 0,8% (Keshi=0,8*0,7=0,56%, Rozu=0,24%)
Receive      (Libor)                  (4,54%)
Pay               4,54%                   Libor
                                                                                                      
Want (Own+
benefit)         4,94%                   Libor+0,06%                               

Bank fee     0,10%
Total           5,04%

Borrowing from the floating rate and undertaking the swap effectively fixes the interest rate at 5,04% for the loan which is significantly lower than the market fixed rate 5,5%.

If the interest rates increase by 0,5%, doing nothing and borrow at 4,7% minimises interest costs, against the next best choice is a swap at 5,04%.

If the interest rates decrease by 0,5%, doing nothing and borrow at 3,7% minimises the cost, compared to the swap at 5,04%.

On the face of it, doing nothing and borrowing at a floating rate seems to be the better choice if interest rates increase or decrease by a small amount, but if interest rates increase substantially then this choice will no longer result in the lowest cost.

The swap minimises the variability of the borrowing rates while doing nothing and borrowing at a floating rate maximises the variability. If Keshi Co wants to eliminate the risk of interest rate fluctuations completely, then it should borrow at the floating rate and swap it into a fixed rate.