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.
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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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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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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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.
Read →This 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