Reference no: EM133623018

Assignment

Instructions:

Your write-up should begin with an opening paragraph that defines the main problem in the case and your recommended solution. The remainder of your paper should support your conclusion and recommendations. This support should be based on your definition of the problem and inferences that you draw from the facts of the case. Structure is important for your argument to be lucid and transparent. You may use a bullet point format if you want, but be careful not to be so cryptic that your argument becomes unintelligible. Also, you may want to use exhibits to support your argument with some quantitative analysis.

You are free to draw on outside sources as well, but if you do you must be careful to include footnotes and references.

The assignment will be based on:

1) Quality of the problem diagnosis: Have you defined the problem and identified the most important impediments to its solution?

2) Quality of analysis: Have you analyzed the pertinent issues correctly and avoided obvious repetition of facts in the case?

3) Quality of recommendations: Have you offered specific plans of action and backed these up with strong arguments?

4) Writing: Do you present the material in a logical, clear and concise way? Below you will find a set of questions to guide your analysis. You should address all of these questions in your analysis. You must make your argument succinctly. I am going to strictly enforce a maximum length of 8 pages of text (12 point font; 8.5"x11" paper; standard margins), plus supporting graphs, figures or tables.

In preparing the case, be sure to read the Case Appendix carefully, which gives a brief overview of syndicated lending. Also, read the "A Guide to the Loan Market" by S&P, which is posted at the course website.

Task

Question A. How should Chase have bid for the loan mandate? Consider the following options: no bid, bid to win, bid to loose. Evaluate the potential advantages and disadvantages associated with each strategy. What are the risks of the loan to Chase? What are the potential rewards of the loan to Chase? What actually happened with the loan mandate? How and why?

Question B. Would you recommend that Disney sign Chase's standard commitment letter? Which parts might concern you (as Disney) and why? As Chase, which part might you alter or remove?

Question C. What syndication strategy would you recommend for the loan? Think in terms of the number of tiers, commitment amounts and fees for each tier, determination of the invitation list, nationality of and number of banks, final hold positions, sub-underwriting vs. general syndication.