Citibank welcomes Microsoft's shareholders to take loans and use Microsoft shares as collateral. The interest from the loans is one of the banks' main sources of income.
Of course, when giving loans, the banks must consider the other party's ability to repay the loan and whether the value of the collateral will depreciate.
Stocks are a type of security that has the risk of depreciating. Especially in the late 1980s, not only Japan, but the US was also the first country to experience financial and property problems. But the US was smart to shift the financial crisis elsewhere. Coupled with the rise of technology in the United States and the wealth they gained from the war, the United States easily got through the crisis. Japan, on the other hand, was miserable. It would take at least 10 years for them to recover.
At the end of the 1980s, all the banks suffered losses, mainly from their shares and property loans. For example, Donald Trump. He owed the banks a lot of money and threatened the banks to reduce the interest.
Some banks even went bankrupt, and their shares became worthless. The banks did not even recover their losses.
That's why the banks were stricter with their risk assessments. That's why the loan amount from Feng Yu's shares must be lower than the current market value.
Feng Yu had considered this, and the loan amount must be lower than the market value of the shares. But when Myers told him about the loan amount, Feng Yu was not happy.
"Myers, I am using Microsoft shares as collateral. Can't you all see Microsoft's profitability? The share prices will surely rise this year, and there is no risk of depreciation. Just look at the contracts signed between Microsoft and those PC companies. Furthermore, Microsoft's office software and servers are selling well now. Their share prices will surely rise! "Feng Yu frowned.
Damn! My shares are worth at least 1.5 billion USD based on the market value. Even a loan of 1.2 billion USD is too little, and you are willing to lend me 700 million USD now?
You are saying that Microsoft's share prices will fall by 50% within 3 years? Isn't this bullsh * t?
"Mr Feng, don't be anxious. Share prices are volatile, and we had set the risk too high. But you should understand." Myers said.
"I don't understand. I want to get a loan of 1.2 billion USD for these shares. Is this a lot? The market value of these shares is at least 1.5 billion USD! And the interest I'm giving you, ask yourself, isn't it very high? By this time next year, the market value of these shares might even double. Can't your appraisers figure this out? "
If you use 1.5 billion shares as collateral and you can only get a loan of 700 million USD, that is too much! If Citibank insisted on this, then Feng Yu could only choose to get a loan from another bank. It was a pity that he was from Hua Xia. He could not enjoy the ultra-low interest rate in Japan. Otherwise, Feng Yu would have gone to Japan to get a loan!
"I'm sorry, Mr Feng. This is Citibank's current condition. If you want more loans, the value of the collateral must increase. "Since the other party was so eager to get a loan, of course, he also wanted to give more loans to Feng Yu. But Feng Yu had only used a portion of his Microsoft shares as collateral. If he had used all his Microsoft shares as collateral, the loan ratio would not be so low!
The higher the loan amount, the better his performance will be, and the more money he will get at the end of the year.
Miles had thought Feng Yu would increase the number of shares he used as collateral after his conditions and persuasion. He would also take a step back and increase the loan amount.
But Miles did not expect Feng Yu to stand up and leave.
"Mr Feng, Citibank's conditions are the same as other banks. You can't go to any bank in New York and get better terms than we do. " Miles shouted. "If you are willing to use more of your shares as collateral, I can increase the loan amount."
Feng Yu did not say a word and walked out of Miles's office.
Miles panicked. Feng Yu left without hesitation!
Miles was not lying to Feng Yu when he said those words. The banks in New York were very strict when it came to shares as collateral, and the loan ratio was very low.
But Feng Yu was not using any company's shares as collateral. He was using Microsoft's shares, which had the potential to rise in value and was highly sought after by the investors. The loan ratio should not be so low!
Miles saw Feng Yu leaving and immediately called the higher management of the banks he was close with. Although they were competitors, they still worked together.
For example, this time, Miles persuaded the banks to work together to lower Feng Yu's loan amount to teach Hua Xia a lesson. Of course, if Feng Yu wanted to get a loan, it would be the banks that helped him.
Those people had agreed on the surface, but Miles was not sure if they would keep their promises. Among those banks' higher management, some agreed on the surface, but they were waiting for Feng Yu to come to them. But they were surprised that Feng Yu did not contact their banks.
At this time, they could no longer sit still. They don't care if they were to contact Feng Yu. Even if they were to give Feng Yu a high loan ratio, the higher-ups will also agree. They believe that Microsoft shares will not fall!
But after they contacted Feng Yu, they were rejected. Although they had increased the loan amount, Feng Yu still did not agree.
Miles could not sit still and called Feng Yu. He told Feng Yu that he had seen wrongly the other day. But the loan amount was not low. He had reported to the higher-ups that Feng Yu wanted a 1.2 billion USD loan, and the higher-ups had agreed.
Feng Yu sneered. "You all agreed? I do not want to get a loan from your bank. Also, Mr. Miles, I will speak to your bank's CEO about this. I think you will be in trouble. "
Miles was shocked. He realized that it was a mistake to deal with Feng Yu the same way he dealt with other people. If the CEO knew about this, he will surely ask him to resign during the board meeting, and where can he find such a high salary?
He was the only Citibank executive that did not receive any equity incentives. He had wanted to use this performance to get some equity incentives at the end of the year. But now, it seems that not only would he not get any equity incentives, but he might also lose his position!
"Mr Feng, I think there is a misunderstanding between us. I would like to explain to you in person."
"No need. I don't have time to listen to your explanations." Feng Yu smiled.
Does this Myers really think that Citibank is so powerful? There are so many banks in the world. If Citibank does not get a loan, other banks will not lend?
Feng Yu had reached an agreement with HSBC to get a 1 billion USD loan at a low interest rate. The value of Feng Yu's shares was only 1.1 billion USD. Compared to Citibank, Feng Yu's conditions were like heaven and earth.
Of course, it was not only Microsoft shares. Li Zekai and Fu Guangzheng were also the guarantors. Feng Yu will use all his Microsoft shares to get loans and make a killing in the US stock market this year.
As for that Meyers, he wanted to teach him a lesson that he deserved, a lesson that he would never forget!
You've already exceeded your reading limit for today. If you want to read more, please log in.
Login
Select text and click 'Report' to let us know about any bad translation.
