PLEASE NOTE: I AM LOOKING FOR A FRESH TAKE ON THE QUESTION AS I POSTED IT BEFORE BUT RECEIVED A CONFUSING ANSWER. HERE IS THE QUESTION:

Describe the cash flows between all counterparties at the time of the initial transactions (today).

Herts County Bank (HCB) lends 5m to Fintech Solutions Ltd. (FTS), a fintech startup in North London, with floating payments at LIBOR. Taking into account its loan book and liquidity considerations, HCB decides to immediately convert this loan into a fixed-rate loan by entering a swap with a big London bank (BLB) to pay 3-month LIBOR and receive 6% fixed on a quarterly basis. Because it believes that interest rates may change substantially in the future, HCB would like the flexibility to terminate the swap, thereby returning to the status of a floating-rate receiver. To achieve this goal, HCB purchases an American-style payer swaption with another bank as the swap counterparty (SC) on the same day. This swaption allows it to enter into a swap paying 6% fixed quarterly and receiving 3-month LIBOR on a notional principal of 5m at the swaption expiry