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Essay / Research Paper Abstract
This 3page paper looks at the way in which the Hong Kong Disneyland loan for HK$3.3 billion was syndicated by Manhattan Chase. The paper starts with the bidding process and then goes on to consider the risks, pricing and other issues that Chase needed to consider when putting forward a bit. The bibliography cites 2 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEdishongkong.rtf
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Unformatted sample text from the term paper:
resort in the area it was apparent that there would need to be significant finance raising. The theme part and resort had a total projected cost of HK$28 billion (US$2.6
billion) (Esty and Kane, 2003). The development would take place in several phases and the Hong Kong government supported the development due to the jobs it would create. The funding
that the development would be required in phases and would be raised by a corporation established specifically for that purpose; Hong Kong Theme Parks International (HTPI) which was jointly owned
by the Hong Kong Government and Walt Disney Corp (Esty and Kane, 2003). There were four sources of finance; the equity provided by Disney and the Hong Kong Government, subordinated
debt from the government were the loan would be repayable in year 16 and the shortfall which was raised as a syndicated loan (Esty and Kane, 2003).
The latter source of financing was used for two main reasons, The first was it would demonstrate that the project was one which was commercially
viable from the perspective of international bankers. Secondly it would also mean that there would be some independent oversight of the construction and the operations as a result of the
interest created by the loan (Esty and Kane, 2003). The actual shortfall in the financing was projected at only HK$2.3 billion for the construction, however the decision was made
by Disney and the Hong Kong Government to raise HK$3.3 billion with HK$2.3 billion as a non recourse loan with a term of fifteen years, and the HK$1 billion as
non recourse revolving credit with the intention of using it for working capital following the competition of construction (Esty and Kane, 2003).
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