Swap for leveraged floating-rate notes (Reading 38) receive, understand, principal, all

mkytz15

Hi all, this is a question from CFAI book 5 Reading 38 p.456 (swaps to manage risk of leveraged floating-rate notes).
I understand that when KAT issues leveraged floater to LifeCo, the principal amount KAT receives is FP with interest rate of 1.5Libor. KAT will use the proceeds to subsequently purchase the bond issued by American Factories with face value of 1.5FP and will receive interest rate of ci.
Last paragraph states that “KAT put up no capital to engage in this transaction”.
My question - KAT should put up some capital since the proceed that KAT receives is FP while KAT has to purchase a bond with face value 1.5FP. KAT has to take 0.5FP from its own pocket? Appreciate for any thoughts, thanks.