The chore of a site visit for a failed loan

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The chore of a site visit for a failed loan

Site visits for loan deals are often a bit of a bore. Unless the site was a brewery or distillery where we could sample the product, myself and my peers usually sent minions on the tour instead.

Some of the chaps these days could do with learning our old tricks.

Take the chap I recently bumped into in the Captain’s Bar. He recently went to a thinly attended bank presentation in Hong Kong SAR for an obscure Chinese borrower. Out of politeness — and because nobody had any questions — he asked the bookrunner if a site visit was being organised. Never in his wildest dreams did he think the lead would be keen to travel into the Mainland’s “middle of nowhere” to see the borrower’s manufacturing plant.

Yet, two days later, he received an invitation for a site visit the following week.

Now, he could have said no. But given he’d been the one to enquire about a visit, he reluctantly agreed to tag along.

Then came the real disappointments. Only three banks came along, including the lead, and as there are no direct flights into the issuer’s city, the visiting bankers had to take a four-hour bus ride to the plant from the closest airport.

The only perk was that as there were just 10 people on the private bus, the chap and his boss could use multiple seats to lie down and nap.   

So how was the actual site visit, I asked?

“I don’t remember,” he replied. “But the loan didn’t close.”

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