Chase Manhattan Bank has been appointed one of two lead arrangers in respect of a HK$3.3 billion ($423 million) non-recourse loan for Hong Kong International Theme Parks (HKITP), which is building a Disney theme park at Penny's Bay on Lantau Island. The facility will comprise a HK$2.3 billion 15-year loan and a HK$1 billion revolving credit facility, say market sources. HSBC is rumoured to be the second lead arranger involved in the deal.
HKITP is a joint-venture between the Hong Kong government and Walt Disney Co, which have respective stakes of 57% and 43%. The estimated cost of contructing the theme park is HK$14.1 billion, of which the Hong Kong government will pay HK$3.25 billion and loan a further HK$6.1 billion, Disney will pay HK$2.45 billion and the remainder will come form the HK$2.3 billion term loan to be arranged by Chase Manhattan. The HK$1 billion revolving credit facility will be used as standby working capital.
The new loan facility is expected to be priced at around 150 basis points over 3-month HIBOR, inclusive of fees, which are likely to be in the region of $250,000 apiece for the lead arrangers. "People are doing this loan for profile, not because they are going to get rich," says one banker.
Getting banks to lend money may prove hard in some cases given what happened at Euro Disney, the financing for which had to be restructured after initial forecasts for park visitors proved overly optimistic.