PCCW: 2000 Deal of the Year...lemon of the decade

PCCW took out a $12 billion syndicated loan to pay for the acquisition of Hong Kong Telecom. The loan was a success, but the acquisition was named one of the biggest disasters since the end of the Asian financial crisis.

In 2000, we gave our Deal of the Year award to a $12 billion syndicated loan that was issued to then small start-up tech company Pacific Century Cyberworks PCCW. The company is now the largest integrated communications company in Hong Kong, but at the time of the deal, PCCW had only been running for 10 months.

PCCW was always destined to grow. Run by Richard Li, second son to property tycoon Li Ka-shing, it had the financial and operational backing locked in from the outset.

At the time, the $12 billion loan was a record transaction in the Asia syndicated loan markets -- more than double the size of the previous record holder in...

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