The facility structuring & terms guide.
Two facilities with identical commercial terms can be structured very differently underneath. Covenant and margin engineering set how much stress a position absorbs; the currency of the loan can differ from the currency of the collateral; longer tenors and follow-on facilities change the discipline over time; and a derivative hedge such as a collar can change how much can be borrowed. This guide maps those levers and links the detailed treatment of each.
The terms that shape a facility, piece by piece.
Each card below links to the detailed treatment of one set of terms that shape a Hong Kong share-backed facility.
Structures
Covenant & Margin Engineering in Share-Backed Facilities
How the loan-to-value trigger, the margin top-up mechanism and cure period, the financial and information covenants, the repayment shape, and the negative pledge are calibrated to a specific holder and position to reduce the chance of a forced sale.
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Structures
Multi-Currency Stock-Backed Facilities
A multi-currency stock-backed facility draws the loan in one currency — USD, HKD, or offshore RMB (CNH) — against HKEX-listed collateral priced in HKD. Why the two currencies can differ, the FX and basis risk it introduces, how an exchange-rate move can shift the effective loan-to-value even when the share price is unchanged, and the cross-border angle for Stock Connect positions.
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Structures
Structured Equity: Collars & Derivative-Integrated Financing
A structured-equity facility pairs a share-backed loan with a derivative overlay — typically a collar (a bought put and a sold call) or a prepaid variable forward — so that downside protection on a concentrated position can support a higher effective loan-to-value than an unprotected stock loan on the same name.
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Structures
Longer-Tenor & Follow-On Facilities
A longer-tenor share-backed facility is a stock loan whose term is measured in years rather than months, designed so it can be renewed, rolled, or enlarged as the position or the need grows — without re-papering the arrangement from scratch. How multi-year tenor reshapes interest treatment, margin discipline, corporate-action windows, and the follow-on and upsizing mechanics.
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Structures
Paying for a rights issue or open offer with a stock loan
How a controlling shareholder funds a rights issue or open offer by borrowing against existing HKEX shares, and how new shares join the collateral.
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Structures
How HIBOR shapes the cost of a Hong Kong stock loan
How Hong Kong dollar stock loans are priced over HIBOR: who publishes it, how the spread is set, fixed versus reset rates, and how HKD compares with USD.
ReadThis guide is educational and is not legal, tax, or regulatory advice. How Hong Kong rules apply to any transaction is a matter for your own Hong Kong counsel. Editorial standards · Disclosures
