Our fear, given the recent volatilityin the Asian banking market, was that if we waiteduntil , we might not be able to get a loan, nevermind a loan with attractive pricing. First, observed structures donot always reflect intended structures, due to uncer-tainty in the bank market. Archives February September At one extreme, small syndicates oftwo or three banks resemble the standard academicmodels of single-bank, private debt lending. Again, this decision is based inpart on the specific bank market where the projectis locatedsome emerging markets have few banks.
Sign up for free today at http: Because sub-underwriting can expedite the processbut does not cost the borrower anything extra, mostborrowers are amenable to it. More generally, however, this decision focuses onthe inclusion of relationship banks and the choicebetween domestic and foreign banks. But to date, we have never invoked themarket flex clause in Asia. Anyattempt to draw lessons from this case study mustconfront two problems.
The two functionsmust be closely coordinated because the deal that ispresented to the borrower structuring has to reflectterms that are acceptable to the market distribution. Similarly, as thechief monitor of borrower repayment, the leadarranger should hold a larger position than otherbanks to demonstrate a clear incentive to monitor theloan.
The question is why and whether his performance is sustainable. In fact, Phase I included plans todouble capacity within the first ten years of opera-tions. Especially pleasedwere the ddisneyland sub-underwriters Credit Agricole,BNP Paribas, and Standard Chartered Bank thatwere not on the short list yet received sub-under-writer compensation. Sign up for free today at http: The real keys to success are having the syndiccates for growth and the ability to finance thisgrowth out of operating cash flow.
It is very important an analysis of the issue of virginity and its positive and negative effects to consider that. The first issue Chase had to address was whetherto proceed with a one-stage, general syndication or atwo-stage syndication with sub-underwriting.
STRUCTURING LOAN SYNDICATES: A CASE STUDY OF THE HONG KONG DISNEYLAND PROJECT LOAN – EconBiz
The parties signed the loan agreement, and up-front underwriting and closing fees were paid, onNovember 15, Esty and Daniel Fisher The a2 Milk Company a2MC became the most or company listed on the New Zealand stock exchange in by capitalizing on a biochemical discovery related to the protein composition of cow’s milk.
Well, though it isn’t in the books on Historic Shrines of America it is a street you “hadn’t ought to” miss. Morgan Stanley may have and may seek syndicahes have business relationships with any person or company named in this journal.
We determine the final takes based on threecriteria: The value of staged commitment in the context of venture capitalorganizations is illustrated in W.
Structuring Loan Syndicates: A Case Study of the Hong Kong Disneyland Project Loan
Relationship considerations, while not the onlyconsideration, are the most important considerationsin deciding on a syndication strategy. Chase launched the sub-underwriting in mid-September by sending invitations to seven banks: The general syndication serves todistribute the loan to a bank group that is large.
In additionto tracking arranger status volume or number ofdeals arrangedleague tables also track providerstatus dollars lent. And so, we decided to bid lessaggressively without fear of losing. The selec-tion of invitation amounts, titles, and fees dependsin part on the universe of available banks and inpart on minimum compensation levels.
The magni-tude of the oversubscription also indicates that asub-underwriting was probably not necessary,and that Chase could have retained a largerfraction of the fees by proceeding directly to ageneral syndication. In the thirty-sixth year after the appearance of the last number of the Spectator appeared the first number of the Rambler.
It need not be said that no disrespect is intended in this.
The final stage in which the underwriter s obtains commitments from additional banks in order to reduce the sub-underwriting exposuresto final hold positions. Arranging banks, which aretypically more interested in generating fee income,seek to structure and lead transactions.
At the same time, Lowe had to decide whether to raise subscription prices to cover the growing losses or keep prices low to attract subscribers as quickly as possible. The retained under-writing fee is usually quite substantial in relation tothe underwriters ultimate exposure as a lender in thedeal.
Note that a jointly mandated deal with sub-underwriting Strategy 6 has even less risk but aneven lower return. Soon be back at work.
But it was not so. Project finance deals have higher closing fees than other loan types because theyrequire more credit analysis and involve sturcturing positions given the non-recourse nature of the loans.
Chases Matt Harris described the otherthree criteria:. As for the fee, they thought something in the rangeof basis points to basis points would beappropriatefor simplicity and confidentiality rea-sons, I assume the fee was tsructuring points. Practice and Documentation, London: Within two days, Moviepass had gotten k new subscribers; within six months, they had more than 2 million.