Chase's Strategy for Syndicating the Hong Kong Disneyland Loan 
ADVANCED CORPORATE FINANCE
Chase’s Strategy for
Syndicating the Hong Kong
Disneyland Loan
Group 1
AFNONIN, Artem 3035162144;
ARDERN, Jeffrey 3035160914;
GUPTA, Agrata 3035161097;
KUTUZOVA, Ekaterina 3035162156;
Disneyland - Chase Case Study
Q1: How should Chase have bid in the first round competition to lead the
HK$3.3 billion Disneyland financing?
After being approached by Disney to raise HK$3.3 billion nonrecourse loan package on a fully underwritten basis, Chase had three options available to approach the deal:
No Bid
Bid to Lose
Bid to Win
Initially Chase decided to Bid to lose because Disney had been their important client however the deal did not seem very attractive because of these reasons:
1. The deal had long tenor. Disney’s term sheet had 15 year tenor and a provision that allowed repayments to start 3 years after opening of the business.
2. Three lead arrangers by Disney. For chase this would mean that fee would be divided into three parts. 3. Other credit issues were that Disney wanted to use operating cash flows for expansion and its unwillingness to subordinate management fees and royalties.
4. Default risk was a concern as Disney Paris was struggling to thrive.
To save their reputation, they went to the final round of making the final proposal. However, they had no intension to win. However Chase decided to change their offer to Bid to win because of the following reasons: 1. Spreads on syndicate lending in the local market were continuing to tighten as the liquidity was improving. 2. A senior H.K Government official underscored the government’s commitment to the project at the Asia Pacific Loan Market Association Conference.
In order to win from the first round itself, chase should have undertaken the following aggressive strategies: 1. Pay an immediate upfront unwritten amount instead of dividing it into two parts spread over some time period.
2. Accepted the other 2 lead arrangers for the transaction
3. Accepted a small underwritten
Chase’s Strategy for
Syndicating the Hong Kong
Disneyland Loan
Group 1
AFNONIN, Artem 3035162144;
ARDERN, Jeffrey 3035160914;
GUPTA, Agrata 3035161097;
KUTUZOVA, Ekaterina 3035162156;
Disneyland - Chase Case Study
Q1: How should Chase have bid in the first round competition to lead the
HK$3.3 billion Disneyland financing?
After being approached by Disney to raise HK$3.3 billion nonrecourse loan package on a fully underwritten basis, Chase had three options available to approach the deal:
No Bid
Bid to Lose
Bid to Win
Initially Chase decided to Bid to lose because Disney had been their important client however the deal did not seem very attractive because of these reasons:
1. The deal had long tenor. Disney’s term sheet had 15 year tenor and a provision that allowed repayments to start 3 years after opening of the business.
2. Three lead arrangers by Disney. For chase this would mean that fee would be divided into three parts. 3. Other credit issues were that Disney wanted to use operating cash flows for expansion and its unwillingness to subordinate management fees and royalties.
4. Default risk was a concern as Disney Paris was struggling to thrive.
To save their reputation, they went to the final round of making the final proposal. However, they had no intension to win. However Chase decided to change their offer to Bid to win because of the following reasons: 1. Spreads on syndicate lending in the local market were continuing to tighten as the liquidity was improving. 2. A senior H.K Government official underscored the government’s commitment to the project at the Asia Pacific Loan Market Association Conference.
In order to win from the first round itself, chase should have undertaken the following aggressive strategies: 1. Pay an immediate upfront unwritten amount instead of dividing it into two parts spread over some time period.
2. Accepted the other 2 lead arrangers for the transaction
3. Accepted a small underwritten