1

Global Banking and Capital Markets

Hong Kong Disneyland HK$3.3 bn project loan

Prof. Ingo Walter

2

Hong Kong Disneyland

Borrower Hong Kong International Theme Parks Limited (HKTP) - owner & operator

Project Cost HK$14 BillionInfrastructure Start End-2000Construction Start End-2002Opening 2005HKTP Structure - HK government 57% plus conversion rights into

common for infrastructure development (up to 75% ownership if exercised) - HK$ 3.25 billion

- Disney 43% - HK$2.45 billion- HK government sub-debt with repayment starting in Year 16 - HK$6.1 billion

- Bank Loan - HK$2.3 billion 15-year non-recourse loan plus HK$1 billion non-recourse revolving working capital loan post-construction – HK$3.3 billion.

3

Mandate - Seeking

Disney acting on behalf of HKTP, asks 17 banks to bid and it could mandate upto 3 banks to lead the deal

Chase options: No bidBid to winBid to lose

4

Chase Options

No bid1. Joint mandate (fee split)2. Aggressive competition (especially from Bank of China and HSBC)3. Bad track record (Eurodisney)4. Credit Issues:

15-year maturityNo collateral other than site yet to be builtNon-subordination of management feesDesire to use cash flows to grow the projectMarket riskForce majeure risk

5. Need for fully underwritten deal

5

Chase Options

Bid to win1. Disney important client2. Marquee deal for the region3. Chase not a top-10 player in Asian project loans Exh.6a (weak spot -

it is global leader). Management pressure to “buy” deal?4. Highly profitable if sole mandate

6

Chase Options

Bid to lose1. Save face as relationship bank but not get stuck in an unprofitable

or excessively risky and excessively long-term deal2. Ideal - get shortlisted and lose gracefully or win with sufficient

compensation3. Effort and expense involved against “soft” returns from the Disney

relationship4. Preserve of optionalilty of waiting.

Decision Decision Bid to loseChase shortlisted

7

League Tables

Position Arranger Name Amount($ billion)

Percentof Total

1 Chase Manhattan Bank $359.6 33.8%2 Bank America 225.6 21.23 Citigroup 94.7 8.94 JP Morgan 58.5 5.55 Bank One 48.9 4.66 Deutsche Bank AG 33.0 3.17 Fleet Boston 31.9 3.08 Credit Suisse First Boston 20.2 1.99 First Union 19.2 1.8

10 Bank of New York 18.1 1.7

Exhibit 6a Book Manager of U.S. Syndicated Loans in 1999 (Full Credit to Book Manager)

Source: Thomson Financial Securities Data

Position Arranger Name Amount($ millions)

Numberof Deals

1 Citigroup $7,919.9 492 Chase Manhattan Bank 6,087.5 393 Bank of America 5,793.0 364 Deutsche Bank AG 4,715.4 445 Soceite Generale SA 4,247.9 456 ABN AMRO Bank NV 3,905.6 477 Credit Suisse First Boston 3,345.9 188 Westdeutsche Landesbank Girozentrale 3,246.0 319 Credit Lyonnaise 2,891.9 43

10 Dresdner Bank AG 2,824.5 38

Exhibit 6b Top Arrangers of Global Project Finance Loans in 1999

Source: Euromoney’s Project Finance, July 2000.

8

League Tables

Position Arranger Name Amount($ millions)

Numberof Deals

1 HSBC $972.7 32 ABN AMRO Bank NV 716.4 33 ANZ Banking Group Ltd. 466.3 84 World Bank 444.1 55 JBIC 363.9 26 Sanwa Bank Ltd. 358.1 37 Industrial Development Bank of India 333.0 18 Chang Hwa Commercial Bank Ltd. 317.7 29 Japan Development Bank 317.5 2

10 Citigroup Inc. 280.7 4

Exhibit 6c Top Arrangers of Asian Project Finance Loans in 1999

Source: Euromoney’s Project Finance, July 2000.

9

Selling Risk to Potential Participants

15 year maturityNo collateral other than site yet to be builtNon-subordination of managementDesire to use cash flows to grow the projectMarket turbulence riskForce majeure risk

10

Risk mitigation

Conservative project capital structureTerm loan is only 15% of total capitalization (HK government loan debt service starts only after the term loan has been repaid)HK government commitment to the project (tourism, jobs)Adequate debt-service covet even in the worst-case scenarioPerformance competence of HK governmentPerformance competence of DisneyUnderwriting risk facing Chase and any sub-underwriters

11

Loan Pricing

Issues - Interest spread and commitment fees to banks - Underwriting fee to borrower- Closing fees paid to banks by Chase

HKTP - Pricing left to bank competition- HKTP not under shareholder pressure on WACC- Ancillary benefits to HK- 100bp +/- not too important to project economics- Flexibility in terms/ covenants more important

Chase - Final target hold position HK$300 million = 10%- Underwriting risk for the rest- Time and effort- Opportunity cost- Reputation risk- Must cover fee to banks

12

Loan Pricing

Banks - Must be convinced by Chase on credit issues- Comparables (Exh. 7) show lots of liquidity and over-subscription at the time

- Spread of 135-135bp seems reasonable for quasi-government deal

Fees - Total fees to HKTP – 125 bpSub-underwriting fees of 25 bpClosing fees of 70 bp top to 50 bp bottom tier

So sub underwriters get 95 bp

13

Selected Recent Comparable Transactions

Exhibit 7 Selected Recent Comparable Transactions

Source: Loan Pricing Corporation

Hong Kong Quasi Sovereign Deals Regional Project Deals Other Corporate Deals

BorrowerAirport Authority

of Hong KongMass Transit Railway

Corp (MTRC)Hutchison

Telephone Corp.Asia Container

TerminalsCheung Kong

Finance Co. Ltd.Industry Public Utility Public Utility Telecommunications Shipping Properties

Country Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong

Rating (S&P, Moody’s) NR A/A3 NR NR A

Guarantor -- -- -- -- Cheung Kong (Holdings) Ltd.

Purpose General Corporate Working Capital/Refinancing

Build-out Financing Project Financing General Corporate

Facility Type Term Loan Term Loan Term Loan Term Loan Term Loan

Amount in Transaction Currency(US$ equivalent)

HK$6,500MM(US$837MM)

HK$3,000MM(US$386MM)

HK$4,000MM(US$514MM)

HK$3,400MM(US$437MM)

HK$2,300MM(US$296MM)

Tenor 3-year bullet/ 5-year bullet 4-year bullet 5-year/ 7-year 10-year amortizing 5-year bullet

Undrawn Pricing (bps) 25.0 15.0 Year 1, 25.0 Thereafter 25.0 50.0 25.0

Drawn Pricing (bps) HIBOR+65.0 bps/HIBOR+85.0 bps

HIBOR+75.0 bps HIBOR+110.0 bps/HIBOR+130.0 bps

HIBOR+170.0bps/HIBOR+195.0bps

HIBOR+58.5bps

Upfront Fees (bps) (U/W) 6.0/10.0(Top Tier)54.0/90.0

(Club Members) 25.0 (U/W) 100/100(Top Tier)50.0/75.0

(Top Tier) 70.0 (Top Tier) 32.5

All-in p.a. to Top Tier (bps) HIBOR+85.0 bps/HIBOR+105.0 bps

HIBOR+81.2 bps(Club members)

HIBOR+123.9 bps/HIBOR+145.6 bps

HIBOR+177.8 bps HIBOR+65.0 bps

Launch Date May 1999 September 1999 November 1999 September 1999 November 1999

Signed Date July 1999 September 1999 March 2000 January 2000 December 1999

Lead Arrangers Chase (books), BOC(books), HSBC, ABN, andSCB

12 banks (self arranged) Chase (books), ABN(books)

ABN, BofA, DG Bank, SG, NAB,WestLB, Dresdner

BofA, BOC, CEF Capital, SG

Remarks Transaction wasoversubscribed andincreased from HK$4,000.Borrower is owned by theHK government and wasset up to build, operate andmaintain HK’s new ChekLap Kok airport

Borrower’s self arrangedclub deal includes ABN,BOTM, Chase, DKB, Fuji,HSBC, BOC, BNP, Citi, DG,Hang Seng and SCB.Borrower operates theterritory’s mass railwaysystem. MRTC is whollyowned by the HKgovernment.

Lead Arrangers raisedover HK$12,000MM forthis non-recourse buildout financing. Borrower isowned by HutchisonWhapoa, Motorola andNTT MobileCommunications (NTT DoCo Mo).

Sponsors are New WorldInfrastructure Ltd., Hong KongLand Holdings Ltd., Sing HungKai Properties Ltd., and Sea-Land Orient Terminals Ltd.Transaction will financeBorrowers’ 41% share inconstruction of containerTerminal 9 in Tsing Yi, HongKong.

Fully underwritten by coordinatingarrangers. The transaction isoversubscribed and increased fromHK$2 bn to HK$2.3 bn. Borrower isLi Ka Shing’s property holdingcompany.

14

Commitment Letter

Problem with changing condition, given the 15-year term:Material Adverse Change Clause

- Underwriter can withdraw commitmentMarket Flex Clause - Chase can alter terms during underwriting period (4+

weeks) - Converts underwriting into best-efforts deal?- Definition of material adverse change- Volatility of HK markets (Exh 1 & 2)- Hedging risk in market not easy due to uncertain drawdown- Flex provision common in other (albeit less volatile) markets- Rarely invoked, even during the Asia crises- Probably would only be used to tweak the terms

Would Disney accept the imbedding market flex in pricing?- Overpayment and over-subscription- Leaving door open for renegotiation

15

Syndication Strategy

Size of Chase take and hold?Larger shows greater commitmentLower fee-to-booking ratioCapital-intensity of loansDistributor of loan products to client banksPolicy is to hold 10% on loans it syndicates

General Syndication vs. sub-underwriting?Sub-underwriting = wholesaleGeneral syndication = retailShare risk and fee (Exch. TN-1)Difficult deal → sub-underwritingClient concern about its relationship banks → sub-underwritingLeague table standing of banks → sub-underwriting

16

Impact of different syndication strategies

Exhibit TN-1 Impact of Different Syndication Strategies

a Assuming an underwriting fee of 1.25%, sub-underwriting fee of 25bp (where applicable), top-tier closing fees of 70 bp, and a final hold position for Chase of HK$300 million.

Syndication StrategyHoldAmounts(HK$ mn)

#1(Ex 8a)

#2(Ex. 8b)

#3(Ex. 8c)

#4 #5 #6

Chase Mandate Sole Joint Sole Sole Sole JointSub-Underwriting Yes No No No No YesNumber of BanksChase $300 1 1 1 1 1 1Coordinating Arrangers (other Mandated Banks)

$300 0 2 0 0 0 2

Lead Arrangers (Sub-underwriters)

$300 4 0 0 0 0 3

Arrangers $250 4 4 4 12 0 4Co-Arrangers $150 4 6 8 0 0 2Lead Manager $100 2 5 8 0 30 2

Total # of banks 15 18 21 13 31 14Chase Fees in US$000a $1,776 $1,126 $2,995 $2,596 $3,365 $884Chase Max. Exposure (HK$mn) $3,300 $1,100 $3,300 $3,300 $3,300 $1,100Chase Exposure in theGeneral SyndicationHK$ in millions $660 $1,100 $3,300 $3,300 $3,300 $550US$ in million $85 $141 $423 $423 $423 $71Chase Fees/ Chase Gen. Synd. Exposure 0.021 0.008 0.007 0.006 0.008 0.013# Banks Needed to control 60% 7 8 10 8 18 7

17

Which Banks to Invite?

Administrative simplicity smaller syndicateDeterrence of default larger syndicateSyndicate size and credit risk FROWNLocal banks give comfort to foreign banksNationality and political riskAppetite for HK$ exposure

18

Denouement

Early September 2000Chase invited 7 banks to submit $HK600mm sub-underwriting commitment in return for 25bp sub-underwriting fees

2 from Disney shortlist3 Disney relationship banksHSBC

Six accepted within 2 weeksCommitment scaled-back from HK$600mm to HK$471mm apiece (6+chase = 7 banks x HK471mm = HK$3.3 billion)General syndication launched on October 11th with invitations to 67 banks and response deadline of October 25th

Total requirement HK$ 3,300 mmSub underwriters HK$ 2,100 mm (7 x HK$300mm hold)Remaining need HK$ 1,200 mm25 banks committed to HK$5.3 billion 4.4x oversubscribed16 banks from Hong Kong and China18 banks wanted to be Arrangers to earn 70bp vs. 50 bp

19

General syndication

Exhibit 1 General Syndication Feedback as of October 27, 2000

Bank Bank Nationality Remarks (Date) Committed AmountLead Arrangers/ Sub-Underwriters (25bps)

1 BNP Paribas France $6002 Bank of China (BOCI) Capital China 6003 Chase Manhattan Bank USA 6004 Credit Agricole Indosuez France 6005 Fuji Bank Japan 6006 HSBC Investment Bank UK/ Hong Kong 6007 Standard Chartered Bank UK/ Hong Kong 600

Sub-Total from Lead Arranger Banks $4,200

Arrangers (70bps)1 Abbey National Treasury Services plc U.K. Committed (10/23) 2502 Agricultural Bank of China China Committed (10/19) 2503 Banca Nazionale del Lavoro Italy Committed (10/20) 2504 Bank of Communications China Committed (10/25) 2505 Bank of East Asia Hong Kong Committed (10/25) 2506 Bank of Tokyo-Mitsubishi Japan Committed (10/24) 2507 Bayerische Landesbank Germany Committed (10/25) 2508 Chekiang First Bank Hong Kong Committed (10/25) 2509 China Construction Bank China Committed (10/24) 25010 DG Bank Germany Committed (10/25) 25011 Hang Seng Bank Hong Kong Committed (10/20) 25012 ICBC Asia China Committed (10/24) 25013 Industrial and Commercial Bank of China China Committed (10/19) 25014 Keppel Tat Lee Bank Limited, Hong Kong Singapore Committed (10/24) 25015 Overseas Union Bank Singapore Committed (10/24) 25016 Shangai Commercial Bank Ltd. Hong Kong Committed (10/25) 25017 Wing Hang Bank Hong Kong Committed (10/20) 25018 Wing Lung Bank Ltd. Hong Kong Committed (10/25) 250

Co-Arrangers (60bps)19 Asia Commercial Bank Hong Kong Committed (10/20) 15020 Bank Austria Creditanstalt Austria Committed (10/24) 15021 Sanwa Bank Japan Committed (10/25) 150

Lead Managers (50bps)22 Dah Sing Bank Hong Kong Committed (10/24) 10023 International Bank of Asia Hong Kong Committed (10/24) 10024 ITIC Ka Wah Bank Hong Kong Committed (10/25) 7525 Liu Chong Hing Bank Hong Kong Committed (10/24) 75

Sub-Total From Syndicate Banks $5,300Total Commitment from All Banks $9.500

Source: Internal company documents

20

Over-subscription

First come, first servedCut all banks back to lowers tier (Manager)Scale all banks back by same percentageScale back of all including sub-underwritersCriteria

FairnessConsistencyClient considerationsEveryone ought to make at least US$500,000 in fees (Exhibit TN-A)

How to deal with over-subscription HK5.3 commitment HK$ 12. billion need?

21

Result

Aggressive scalebacks from 30% to 63% (Exhibit TN-2)Lead arrangers/ underwriters (7) HK$3.3 billion HK$ 910mmArrangers (18) HK$ 5,000mm HK$ 1,890mmCo-arrangers (3) HK$ 450mm HK$ 255mmLead managers (4) HK$ 350 mm HK$ 245mmTotal (32) HK$ 9,600 bln HK$ 3,300mm

22

Credit facility allocations

Exhibit TN-2 HK$3.3 Billion Senior Secured Credit Facility AllocationsTerm Loan Revolving Credit Term Loan Revolving Credit Committed Committed Allocation Facility Allocation

Amounts (HK$) Amounts (HK$) % Scaled Back

Lead Arrangers/ Underwriters 328,571,428.6$ 142,857,142.9$ 72.4% 72.5% 90,687,500$ 39,312,500$ 1 Bank of China, Hong Kong Branch 328,571,428.6 142,857,142.9 72.4% 72.5% 90,687,500 39,312,500 2 BNP Paribas 328,571,428.6 142,857,142.9 72.4% 72.5% 90,687,500 39,312,500 3 The Chase Manhattan Bank 328,571,428.6 142,857,142.9 72.4% 72.5% 90,687,500 39,312,500 4 Credit Agricole Indosuez 328,571,428.6 142,857,142.9 72.4% 72.5% 90,687,500 39,312,500 5 The Fuji Bank Limited 328,571,428.6 142,857,142.9 72.4% 72.5% 90,687,500 39,312,500 6 The Hongkong and Shanghai Banking Corporation Limited 328,571,428.6 142,857,142.9 72.4% 72.5% 90,687,500 39,312,500 7 Standard Chartered Bank 328,571,428.6 142,857,142.9 72.4% 72.5% 90,687,500 39,312,500

Sub Total 2,300,000,000 1,000,000,000 Average: 72.4% 634,812,500 275,187,500

Arrangers1 Abbey National Treasury Services plc 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 2 The Agricultural Bank of China, Hong Kong Branch 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 3 Banca Nazionale del Lavoro S.p.A., Hong Kong Branch 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 4 Bank of Comuunicaitons, Hong Kong Branch 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 5 The Bank of East Asia, Limited 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 6 Bayerische Landesbank Girozentrate, Hong Kong Branch 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 7 Chekiang First Bank Ltd. 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 8 China Construction Bank, Hong Kong Branch 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 9 DG Bank Deutsche Gennossenschaftsbank AG, Hong Kong Branch 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500

10 Hang Seng Bank Limited 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 11 The Industrial and Commercial Bank of China, Hong Kong Branch 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 12 The Industrial and Commercial Bank of China (Asia) Limited 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 13 Keppel TaLee Bank Limited, Hong Kong Branch 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 14 Overseas Unione Bank Limited, Hong Kong Branch 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 15 Shanghai Commercial Bank Limited 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 16 Tokyo-Mitsubishi International (HK) Limited 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 17 Wing Hing Bank, Limited 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500 18 Wing Lung Bank Limited 174,242,424.2 75,757,575.8 58.0% 58.0% 73,187,500 31,812,500

Sub Total 3,136,363,636 1,363,636,364 Average: 58.0% 1,317,375,000 572,625,000

Co-Arranger1 Asia Commercial Bank Ltd. 104,545,454.5 45,454,545.5 43.4% 43.2% 59,187,500 25,812,500 2 Bank Austria Creditanstalt International AG, Hong Kong 104,545,454.5 45,454,545.5 43.4% 43.2% 59,187,500 25,812,500 3 The Sanwa Bank, Limited 104,545,454.5 45,454,545.5 43.4% 43.2% 59,187,500 25,812,500

Sub Total 313,636,364 136,363,637 Average: 43.3% 177,562,500 77,437,500

Lead Manager1 Dah Sing Bank, Limited 69,696,969.7 30,303,030.3 30.1% 29.7% 48,687,500 21,312,500 2 International Bank of Asia Limited 69,696,969.7 30,303,030.3 30.1% 29.7% 48,687,500 21,312,500 3 CITIC Ka Wah Bank 52,272,727.3 22,727,272.7 30.3% 29.3% 36,437,500 16,062,500 4 Liu Chong Hing Bank Limited 52,272,727.3 22,727,272.7 30.3% 29.3% 36,437,500 16,062,500

Sub Total 243,939,394 106,060,606 Average: 29.9% 170,250,000 74,750,000

32 TOTAL 5,993,939,393 2,606,060,607 2,300,000,000 1,000,000,000

Commitment from Lead Arrangers 4,200,000,000 Commitment from General Syndicate 5,420,000,000 Total Commitment for HKDL Transaction 9,620,000,000

Oversupscription 191%

23

Estimated Compensation for the Transaction

Loan Amount ($HK millions)= $3,300 Mandate= SoleUnderwriting Fee= 1.25% assumed fee Sub-Underwriting= Yes

Sub-Underwrting Fee= 0.25% $HK/$US Exchange Rate= 7.8Top-Tier (Arranger) Fee= 0.70% Total Underwriting Fees ($HK millions)= $41.25

Sub Initial Underwriting Underwriting General Syndication

Commitment Total Invitation Total Percent Final Total AllocationAmount Commitment Allocation Amount Commitment Scaled Allocation Allocation per Bank

# of Banks (HK$MM) (HK$MM) (HK$MM) (HK$MM) (HK$MM) Back (HK$MM) (HK$MM) (US$MM)Chase 1 $3,300 $3,300 $471 $471 72.4% $130.0 $130.0 $16.7# Other Mandated Banks 0 $0 $0 $0 $0 0.0% $0.0 $0.0 $0.0Lead Arrangers (Sub UW) 6 $2,829 $2,829 72.4% $130.0 $780.0 $16.7Arrangers 18 $250 $4,500 58.0% $105.0 $1,890.0 $13.5Co-Arrangers 3 $150 $450 43.3% $85.0 $255.0 $10.9Lead Manager @HK$100 2 $100 $200 30.0% $70.0 $140.0 $9.0Lead Manager @HK$75 2 $75 $150 30.0% $52.5 $105.0 $6.7

32 $3,300 $3,300 $8,600 $3,300.0

Per Bank Income (HK$000)Underwriting Closing Underwriting Sub-U/W Closing Pool Total Per Bank Total for All Banks

Fees Fees Spread Spread Fee Income Income (HK$000) (US$000) (HK$000) (US$000)Chase 0.30% 0.70% $9,900 $1,179 $910 $106 $12,095 $1,550.6 $12,095 $1,551# Other Mandated Banks $0 $0 $0 $0 $0 $0.0 $0 $0Lead Arrangers (Sub UW) 0.25% 0.70% $1,179 $910 $106 $2,195 $281.4 $13,170 $1,688Arrangers 0.70% $735 $735 $94.2 $13,230 $1,696Co-Arrangers 0.60% $510 $510 $65.4 $1,530 $196Lead Manager @HK$100 0.50% $350 $350 $44.9 $700 $90Lead Manager @HK$75 0.50% $263 $263 $33.7 $525 $67

Total Fees $41,250 $5,288General Closing Total

Syndication Final Fees Closing FeesClosing Allocation per Bank All Banks

Calculation of Pool Income Fees (HK$MM) (HK$000) (HK$000)

Total Closing Fee Income Available 0.70% $3,300 $23,100 Total ChaseTotal Closing Fee Income Payable Underwriting FeeChase 0.70% $130.0 $910 $910 Fee (US$000)Other Mandated Banks $0 $0Lead Arrangers (Sub UW) 0.70% $130.0 $910 $5,461 1.00% $493Arrangers 0.70% $105.0 $735 $13,230 1.10% $916Co-Arrangers 0.60% $85.0 $510 $1,530 1.20% $1,339Lead Managers @ HK$100 0.50% $70.0 $350 $700 1.30% $1,762Lead Managers @ HK$75 0.50% $52.5 $263 $525 1.40% $2,185

$22,356 1.50% $2,608

24

Success?

Favorable:Massive oversubscription is a vote of confidence in the projectDeal closed in a timely way within parameters satisfactory to DisneyBroad bank participationNo bank who wanted to participate was excludedChase had sole mandate on this marquee deal – one of the most important since the Asian Crisis that started in 1997Chase and other underwriters earned very attractive fees (Exhibit TN-3)Chase - HK$ 12,095,000 (1.25% underwriting fee minus 0.95% paid to sub-underwriters)Others – HK$ 2,193,500 eachDelighted – CA Indosuez, BNP and Standard Chartered (not shortlisted, no more work than smallest syndicate banks but got much higher compensation)

25

Success?

Not so favorable:Heavy over-subscription indicates overpricing

By Disney?By Chase?

Sub-underwriting was probably unnecessaryChase could have kept more of the fees (chose not to in order maintain relations with banks)Did not meet fairness and minimum fee criteriaThat 20 out of 32 final banks were from HK or China suggests political pressure

Closing:Loan agreement signed on November 25, 2000. Fees paidFinancial closing date (draw-downs possible) on 31 March 2001.