Aaron Chow

HSBC has announced the appointment of Aaron Chow as Managing Director, Head of Event Driven Syndicate, within Leveraged and Acquisition Finance, Asia Pacific, with effect from 9 July 2008.

Chow has over 15 years of banking and leveraged finance experience, most recently at UBS where he was a Managing Director, Head of Syndicated Finance within Global Leveraged Finance focusing on leveraged buyout and mergers and acquisitions in the region for financial sponsors and corporates.

Chow will be based in Hong Kong and will report to David Simons, Head of Leveraged and Acquisition Finance, Asia Pacific.
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In addition, Phil Lipton, current Head of Syndicated Finance, Asia Pacific, will work alongside Chow and take on the new role of Managing Director, Head of Corporate Loan Syndicate, reporting to Simons.

• Aaron Chow, Executive Director, Global Leveraged Finance and Head of Syndicated Finance, non-Japan Asia, UBS AG

Aaron Chow, Executive Director, Global Leveraged Finance, Head of Syndicated Finance, Asia, UBS AG

Aaron Chow, Executive Director, Global Leveraged Finance and Head of Syndicated Finance, non-Japan Asia, UBS AG

Aaron Chow, Executive Director, Global Leveraged Finance, Head of Syndicated Finance, Asia, UBS AG

Aaron Chow, Executive Director, Global Leveraged Finance and Head of Syndicated Finance, non-Japan Asia, UBS AG

But as Aaron Chow , vice-president for global syndicated finance at Chase explains , the assets of these companies are relatively minor in relation to the security package for the loans.

The principle behind acquisition financing is different from share financing.According to Tay , share financing involves financing the purchase of shares in a company - not necessarily 100 % - and relying on dividends earned from such shares to service the loan.In the case of acquisition financing , it was leveraged on the cash flow of the target company to raise the financing and rely on such cash flow as the primary source of debt servicing.Lenders have access to all the cash flow and are not relying only on dividends to service the debts.

In the financing , Tay says UBS Capital and CVC managed to pool the cash flow of all the target companies to service the loans.
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As it is , the structure of the loan facilities , according to Chow , is very similar to other cash flow lending.The covenant package includes the usual maximum debt service ratio , minimum interest coverage ratio and maximum fixed charge ratio.We have strict limitations on distribution of dividends to shareholders to ensure that the cash flow is retained to service the loans , says Tay.

Because of the strong sponsors , the target company's superior track record and higher yield , this LBO generated strong interest among bankers , so it was not surprising that the syndication itself was heavily oversubscribed with the total commitment amounting to US$235 million.We launched the sub-underwriting phase in early June and invited five banks , which provided commitments of between US$20 million and US$25 million each , Chow recalls.But we managed to sell it down to between US$10 million and US$13 million each.

Aaron Chow has been promoted to Deputy Head of Syndicated Finance at DBS Bank.