A company that wants to convert fixed-rate interest payments on an outstanding loan to floating-rate interest payments will most likely enter into which of the following interest rate swaps?

The company aims to convert fixed-rate interest payments to floating-rate interest payments, which requires it to effectively "flip" its payment obligation from a fixed rate to a floating rate. In this scenario, entering into an interest rate swap where it pays floating-rate interest and receives fixed-rate interest achieves the desired effect.

By paying floating-rate interest, the company alleviates its obligation to make fixed payments, thus moving towards a floating-rate structure. Meanwhile, receiving fixed-rate interest provides a hedge against fluctuating rates, which may be beneficial depending on the anticipated movement of interest rates in the market. This arrangement allows the company to transition its interest obligations in alignment with its financial strategy or expectations surrounding interest rate movements.

Choosing any other mechanism would not accomplish the goal of converting fixed payments to floating payments effectively. For instance, paying fixed and receiving floating or similar options would not facilitate the desired change. This option maximizes flexibility in managing interest expenses according to current market conditions.