CREDIT | Zhuang Dinghua

13
APAC CORPORATE CREDIT SERIES:
REAL ESTATE DEVELOPER LENDING ANALYSIS

Research Ongoing
Thank You for Your Patience

HSBC-style credit assessments for key HK sectors

- Objective:Demonstrate credit risk analysis capabilities for HSBC's core markets
- Methodology:
- Reverse-engineered 3 actual HSBC deals (2024-2025)
- Modeled using HKEX data, CBRE reports, and HIBOR forecasts
- Incorporated HK-specific risks (vacancy tax, HIBOR volatility, China exposure)
- Tools: Excel, Bloomberg Terminal, HKMA guidelines

Use "Fictional Client" disclaimer:
"Models based on composite HK market data; no actual client relationship"
Red accents (#DB0011)
Professional blue headers (#004F9F)
Clean white background
Week 4: Soft launch to 3 HSBC contacts for feedback
Critical: Go live before September applications open. This portfolio will make you stand out as the candidate who already thinks like an HSBC banker.

INTRODUCTION

The Heterogeneous APAC Financing Ecosystem

How to Build Each Memo (5-Step Process)

Tools:

Data: HKEX announcements, company annual reports, CBRE HK market reports
Software: Excel (for models), PowerPoint (for pitch deck format)
Templates: Modify Wall Street Prep’s "Leveraged Loan Credit Memo"

Step 1: Steal Real HSBC Deal Structures

Research 2024-25 HSBC HK transactions:
- ESR-Kendall Square refinancing (logistics)
- Xiaomi’s HK$4B syndicated loan (tech)
- New World Dev’s sustainability-linked loan (real estate)
Copy: Tenor (3-5Y), pricing (HIBOR + 250-400bps), covenants (e.g., Debt/EBITDA < 4x).

Step 3: Write the Memo Like an HSBC Analyst
Use local jargon and HK risk factors:

Recommend APPROVAL with tight covenants:

LTV cap: 55% (vs. HKMA guideline 60%)

Debt yield lock: 8.5% minimum

Trigger: If vacancy in Tsim Sha Tsui submarket >13%, require additional collateral (Gold Coast residential portfolio)."*

Step 4: Add Visuals HSBC Uses
Loan Structure Timeline: Drawdowns, repayment bullets

HIBOR Sensitivity Table: ICR at +1%, +2%, +3% hikes

Collateral Map: Location of Kowloon Tower vs. competing properties

Step 5: Defend Your Decision
Prepare a 5-minute pitch:
Why I’d reject Quantum Shenzhen’s $300M request (but counter with $180M):

Their Shenzhen factory is collateral, but US tariffs could cut EBITDA 30%.

Proposed HK$1.2B covenant cushion is insufficient."*

weekTaskDeliverable

1Reverse-engineer 3 real HSBC HK dealsDeal summary templates (Excel)

2-3Build real estate model (Chan Holdings)Full Excel model + 5-page memo

4-5Structure tech loan (Quantum Shenzhen)Credit pitch deck (10 slides)

6-7Model logistics covenant triggers (Victoria Harbour)Covenant compliance tracker (Excel)

8Combine into branded PDF"HSBC HK Deal Portfolio v1.0"

Upload to Cloud: Host on Google Drive (link in CV: "HK Credit Analysis Portfolio available upon request").

C

Chan Holdings - $500M Kowloon Tower Refinancing

Case 1: Chan Holdings - $500M Kowloon Tower Refinancing

(Real Estate)

Client Profile: Family-owned developer (e.g., fictional "Chan Holdings")

Key HK risks to model: Vacancy rates ↑, construction cost overruns, HIBOR spikes

HSBC deal type: $500M Refinancing for Kowloon Tower

Key Analysis:
[![Loan Structure Timeline](screenshot-timeline.jpg)]
- Collateral stress testing (25% vacancy scenario)
- HIBOR sensitivity analysis (+300bps shock)
- Covenant package design (LTV triggers, debt yield lock)

Recommendation:
✅ Approved with tighter LTV cap (55%)
[View Credit Memo Excerpt](chan-holdings-memo.pdf)

1. Collateral Valuation:
- value Kowloon Tower:
`Current Value = HK$8B` (source: Centaline Property data)
- Stress test: `-25% if vacancy > 15%` (HK Q2 2025 avg: 12%)

2. Debt Sizin
- Max loan = 50% LTV → HK$4B
- HSBC’s share: $500M (syndicate leader)

3. Covenant Triggers:
- `Interest Coverage Ratio (ICR) < 2.0x` = Default
- Model impact of HIBOR ↑2% (ICR falls from 3.1x → 1.8x)

Sample Memo Excerpt (Chan Holdings)

Recommendation:APPROVE $500M @ HIBOR+325bps
Key Risks:
1. Tenant concentration (30% revenue from 1 retailer) → *Mitigation: Require anchor tenant lease extension*
2. Construction delay penalties ($2M/day) → *Covenant: Cap penalty exposure at 15% EBITDA*

Collateral Stress Test:
| Scenario | Value (HK$) | LTV |
|----------------|-------------|-------|
| Base Case | 8.0B | 50% |
| Vacancy > 15% | 6.4B | 63% → **BREACH!** |

SHOW AGENCY: "I called 3 HK property agents to verify rental forecasts."

C

Quantum Shenzhen - $300M RCF for US Expansion

Client Profile: Shenzhen AI hardware maker

HSBC Deal Type:$300M RCF for US expansion

Key HK Risks to Model: US tariffs, RMB depreciation, supply chain breaks

C

Victoria Harbour Logistics - $200M Capex Loan for Automated Warehouse

Cleinmt profile: port operator

HSBC Deal Type: $200M Capex Loan for automated warehouse

Key HK Risks to model: Competition from Shenzhen ports, fuel price volatility

TECHNICAL APPENDIX

Methodology Deep Dive

Methodology Deep Dive
Data Sources:
- Rental comps: Centaline Property (2025 Q2 report)
- HIBOR forecasts: HKMA baseline scenario
- Covenant benchmarks: 12 recent HK syndicated loans

Model Features:
- Automated covenant breach alerts
- Collateral liquidation waterfalls
- Currency mismatch analysis (HKD/RMB)

Embed interactive elements:

html

Copy

Download

Run

 <div class="calculator"> <label>HIBOR Increase:</label> <input type="range" min="0" max="300" value="100"> <output>ICR: 2.8x → 1.9x</output> </div>

I

Methodology Deep Dive

Embed interactive elements:

html

Copy

Download

Run

<div class="calculator"> <label>HIBOR Increase:</label> <input type="range" min="0" max="300" value="100"> <output>ICR: 2.8x → 1.9x</output> </div>

CONCLUSION

Why This Matters for HSBC Hong Kong

These analyses demonstrate direct understanding of:
1. HSBC's key client risks in Hong Kong's volatile market
2. Collateral-backed lending mechanics for RE/Tech/Logistics
3. Local regulatory constraints (HKMA LTV guidelines)"

*Full portfolio available upon request*