Chase’s Strategy for Syndicating the Hong Kong Disneyland Loan
Group 15

XIA Yidan, ZHANG Kuo, ZHU Shihuai, WANG Qian

2012 acer CHUK
2012/9/24
Chase’s Strategy for Syndicating the Hong Kong Disneyland Loan
Group 15

XIA Yidan, ZHANG Kuo, ZHU Shihuai, WANG Qian

2012 acer CHUK
2012/9/24

How should Chase have bid in the first round competition to lead the HK$3.3 billion Disneyland financing (Bid to win or bid to lose?)
In the first round of competition, there are 17 banks competing to propose a mandate for syndication. How should Chase make the proposal to Disney depend on the following respects: (1) Disney’s requests (2) Evaluation of the returns and risks. Based on the previous two parts, design the
In conclusion, this project’s syndicate risk is low.

(3) Bidding strategies:
After considering Disney’s request and the above return-risk profile, it can be seen that although the deal has quite a lot of concerns, there are reasons and room for Chase to bid aggressively.
Therefore it is justifiable to use “bid to win” strategy instead of the “bid to lose” strategy. Chase have to bid enough aggressively to make sure it will enter the final short list of mandated banks.
As Disney would you sign the standard commitment letter? Which parts might concern you and why? As Chase, which parts are you willing to alter or remove?
As Disney, I would not sign the standard commitment letter directly without a further negotiation on altering or removing some important provisions or clauses included in the standard commitment letter. Among all the sub-clauses inherited within the standard commitment letter Chase used, the “market flex” provision brings the most concern to Disney. As stated in the original provision, Chase will be entitled with the right to change the structure, terms, amount, or pricing of the facility if the syndication is not completed due to some unfavorable development in the Hong Kong market or economic condition. Similarly to the “material adverse effect” or “material adverse change” clauses to some extent, this provision will reduce Chase’s uncertainty and risk around the syndication process