Case Name :      Hutchison Whampoa Ltd.: The Capital Structure Decision

Authors :           Andrew Karolyi, Larry Wynant, Geoff Crum, Peter Yuan

Source :             Ivey Publishing

Case ID :            99N021

Discipline :        Finance

Case Length :    26 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

Hutchison Whampoa was considering strategies for its long-term capital structure. The HK$35 billion Hong Kong-based conglomerate had ambitious growth plans in multiple business sectors in different geographies. Traditionally, like many of its domestic peers, Hutchison had relied entirely on short- to medium-term bank loans. Its demand for long-term financing, attractive rates in other capital markets (especially the United States), and concern about a more diversified investor base had led Hutchison to explore other financing options. In particular, the company was debating the benefits of a Yankee Bond Offering. At the time, Hutchison had already approached Moody’s and Standard & Poor’s for a bond rating.