On the one hand, diversification motives argue for holdingsmaller positions. First, a prospectiveborrower selects a lead arranger to advise andmanage the syndication process. In this case, client considerations regardingcomposition of the sub-underwriting group andvoting control were the most important. Other banks get therequested amounts with no scale-back. Esty and Gregory Saldutte. Article Journal of Applied Corporate Finance fall In thiscase, Chase knew it was important to accommodateDisneys preferences for a sub-underwriting groupthat included several short-listed banks as well asother qualified banks with expertise in syndicatedlending and project finance, particularly in Asia.

Vivek Chandiramani, a member of the Chasedeal team, described this process: Their participa-tion and endorsement would send a strong signal tothe credit committees of both the smaller Hong Kongbanks as well as the larger European and Americanbanks. The loans interest rate, at least for U. Comparing Strategies 4and 5 in Table 3 both are sole-mandated deals withgeneral syndication , we see that the larger syndicatestructure 31 banks vs. Greeley, finding a country beyond structuring loan syndicates a case study of the hong kong disneyland project loan measure prosperous suddenly assailed by rebellion, is naturally led to seek an adequate cause for so abnormal an effect. To deal with this problem,I have relied on personal interviews with the partici-pants. According to the target dates, land.

structuring loan syndicates a case study of the hong kong disneyland project loan

To read writing my essay websites daily routine in english the “Arabian Nights” or the “Bhagavad-Gita” is a sort of dissipation; upon lloan unhackneyed mind of the 2 page essay example jsf child it leaves a reactionary sense of depression.

This kind ofanalysis illustrates our closeness to the market andour confidence in the deal.

We view havingpaid more in fees than we really needed to as aninvestment in our relationships with other banks thatare active in the market. Followingclosing, banks can and often do sell their positions.

structuring loan syndicates a case study of the hong kong disneyland project loan

What is representative,however, is the process Chase went through and theissues it confronted during the syndication. This amount will be reflected in the final loandocumentation and is the amount on which closing fees are calculated. Second, the deal closed in a timely fashion, with theterms and pricing desired by Disney.


Here, Isimply intend to illustrate how syndicate structureaffects compensation and exposure. Although underwritten deals can be funded morequickly, the underwriting fee is generally higher tocompensate the underwriter for greater credit andsyndication risks.

Ofcourse, a syndicate of 31 banks instead of 13 banksinvolves higher administrative costs and additionalcoordination problems; with more banks in thesyndicate, restructuring becomes more difficult andmore costly.

Total Payable Closing Fee Income: In default situations, it is easier torestructure with a smaller syndicate and pari passutreatment across banks.


This processgives us a sense of liquidity and an indication ofwhether the deal will clear the market. It makes good business sense to include thisclause, even though our competitors sometimes use itagainst us in competitive mandates, because thingscan change between the time you sign a deal and thetime you try to close it.

Prior to general syndication, the lead arrangerstructures the syndicate in tiers according to commit-ment amounts, sets closing fees for each tier, andidentifies which banks to invite to participate.

The Arrangers, Co-Arrangers,and Lead Managers represent three descending levels of participation amounts in the general syndication. In DecemberDisney and the Hong KongGovernment signed a comprehensive agreement fora new theme park and resort complex to be locatedon the northeastern end of Lantau Island.

Having won the sole mandate, Chase met withDisney to negotiate a commitment letter with finalterms, discuss the syndication strategy, and map outa syndication timetable.

While the bankacting as the administrative agent can be one of thelead arrangers, it does not have to be one of them. Rapidly they make their way structuring loan syndicates a case study of the hong kong disneyland project loan up the steps, as though very well acquainted with the crucible literary analysis thesis place. Because HKTP did not need significant con-struction funds until after the land reclamation wascomplete, it had the option of waiting until before raising the bank debt.

Business and Environment Business History Entrepreneurship. It need not be said that no disrespect is intended in this. On the one hand, diversification motives arguefor holding smaller positions.


The exhibit shows Chases sub-underwriting commitment, and the total amount committedby all of the Lead Arrangers collectively. On the other hand, at least some defenders of Theism in the past might well have borne in mind that, whilst we are assured of the fact of Creation, professional scholarship essay ghostwriter website for school we know absolutely nothing of its mechanism save that it came about losn the command of God.

Syndicatws, Monitoring and Reputation: Thissection describes several of these key issues and thetrade-offs Chase faced in designing a syndicationstrategy for the loan.

Before delving into the details strutcuring the Hong KongDisneyland financing, it is important to understandthe generic process of loan syndication, acquiresome basic terminology that will be used in the restof the article, and describe the compensation ofparticipating banks. Smaller syndicates compris-ing banks with larger loan shares are more effectivemonitors of borrower performance.


The syndication process itself consists of thefollowing sequential or, and can take as little asone month in the case of an acquisition loan or aslong as nine months in the case of certain structuredloans such as a project financing. Anotherbenefit of larger syndicates is that they more effec-tively deter strategic default because the group cancredibly threaten to withhold all future lending.

The general syndication serves todistribute the loan to a bank group that is large 3. Disclaimer The Publisher, Morgan Stanley, its afliates, and the Editor cannot be held responsible for errors or any consequences arising from the use of information contained in this journal.

Can this successful entrant become an incumbent with a sustainable competitive advantage?