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Chase’s Strategy for Syndicating the Hong Kong Dis

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FINA 3088 Case Study 1 ---- Chase’s Strategy for Syndicating the Hong Kong Disneyland Loan (A)&(B)

Bid Strategy of the First Round
The first round bid was to show its commitment and price, while detailed proposal would be submitted after being shortlisted. Thus, Chase had mainly three kinds of concern at that stage: risk, profit and reputation.

Reputation
From Exhibit 6, there is no doubt that Chase was the top bank in syndicated finance in the US and over the world. However, it recorded limited performance in Asian market though Chase had put numerous resources into its global group. At the same time, Chase was among Disney’s top relationship banks and Disney as well as its project in Hong Kong had a noticeable market signal. …show more content…

Although Chase argued that this term is rarely invoked and in Asia they have never invoked it, Disney was paying for a fully underwritten deal expressly to avoid syndication risk, especially the amount of the loan. If the syndication amount suddenly changes in the economy crises, it may bring serious trouble to the Disney’s operation and financial stability. At the same time, if the price were to increase dramatically, it would be a high burden for Disney to pay the interest.

Since Disney is one of the large clients, Chase may have to do some amendments to smooth the negotiation process. As chase, to remove or alter the rights to change the amount of the syndication may be acceptable as most of the loan have been assigned to other banks. However, some flexibility in terms of the pricing must be guaranteed to ensure the profitability of Chase in some certain economy downturn.

Syndication Strategy for the loan
We now discuss the syndication strategy in terms of the following components:

Number of Tiers ---- fewer tiers
It can be argued that more tiers can increase the number of banks to involve, thus

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