Chapter 382: Saved Nine Hundred Million
The next morning, Lin Haoran made a trip to the Hong Kong branch of Citibank.
It was now November 25th, and December was approaching quickly.
Lin Haoran carried with him a portion of the equity certificates of the Land Group. This portion was sufficient to temporarily use as collateral at Citibank, enabling him to secure a substantial loan.
A legal advisor from Huanyu Investment Company also accompanied Lin Haoran to assist in handling the loan procedures.
It was evident that the branch manager of Citibank's Hong Kong office had already received a call from Mr. Walter Wriston, the Chairman of Citibank's headquarters in the United States.
As a result, Lin Haoran was warmly received by the branch manager the moment he arrived at the bank.
Originally, Lin Haoran had been undecided about whether he should apply for the loan from the Hong Kong branch of Citibank or go directly through the U.S. headquarters. After all, given his current status and close relationship with Citibank's senior executives, securing a loan from the headquarters would not be difficult.
However, after learning about the interest rates in the U.S. over the phone, Lin Haoran decisively abandoned the idea of borrowing from the U.S. side of Citibank.
Currently, not only had Hong Kong's lending rates surged significantly, but the U.S. was also not spared — in fact, the increase in U.S. interest rates was even more drastic.
To combat rampant inflation, the Federal Reserve had implemented short-term rate hikes this year, which in turn drove up various loan interest rates across the board, including mortgage rates.
At the beginning of the year, the U.S. federal funds loan rate was still around 14%.
But now, ten months later, the interest rate range had skyrocketed to an astonishing 19% to 20%, setting a historic high in the U.S.
By comparison, although Hong Kong's interest rates were also high, they appeared relatively moderate — hovering around 15% annually.
For certain key clients, Hong Kong banks could offer additional discounts, bringing the effective rate down to 13–14%.
Even so, compared to when Lin Haoran previously applied for a HKD 2 billion loan from Huifeng Bank, the current short-term lending rate had indeed risen.
At that time, Huifeng Bank had given Lin Haoran a favorable 10% rate. But Lin Haoran was already aware of the current banking environment.
Therefore, he came prepared for high interest rates.
"Mr. Lin, considering that you are one of Citibank's top-tier partners, our Chairman has personally authorized a preferential rate for your loan this time, in order to further solidify our cooperation with you.
Hence, the HKD 3 billion loan you're applying for will carry an annual interest rate of just 10%. That is to say, if the loan term is one year, the annual interest would amount to HKD 300 million, making the total repayment at maturity HKD 3.3 billion.
May I ask if you are satisfied with this arrangement?" the branch manager politely asked after inviting Lin Haoran into his office and serving him a cup of hot tea.
"Oh? A 10% interest rate?" Lin Haoran was slightly surprised upon hearing this.
Originally, he thought that if Citibank offered him a 13% preferential rate, that would already be quite good. He hadn't expected that they would proactively lower it to just 10%.
If, as he had anticipated, they gave a 13% rate, Lin Haoran would still have accepted it — after all, that was already a very generous offer under market conditions.
But now, with a 10% rate, he was effectively saving HKD 90 million in interest. How could Lin Haoran not be surprised?
This was no longer like two years ago.
Over two years ago, when Lin Haoran took out a loan from Yumin Finance Company, the lending rate was only between 5% and 10%. At that time, Yumin had even offered him a favorable rate.
However, back then, the oil crisis had not yet erupted, the global economy was still stable, and Hong Kong's real estate market had not yet become this feverish.
So lower interest rates were fully understandable in that context.
But now, the situation had completely changed.
Loan interest rates at financial institutions in Hong Kong — and across most of the world — had increased significantly.
The reason was obvious: due to the oil crisis, prices surged in many countries and regions, and in order to combat serious inflation, governments raised interest rates to suppress high prices, even if it meant triggering a recession, just to bring prices back to normal levels.
As a result, the financial sector experienced explosive growth.
Over the past two years, Hong Kong had also firmly established itself as one of the world's leading financial hubs, just behind New York and London.
According to Lin Haoran's knowledge, even Yumin Finance Company was now offering interest rates in the 14–15% range to its clients.
So for Citibank to offer him a 10% rate — that was truly generous!
Today, with the booming real estate market in Hong Kong, many real estate companies and homebuyers rely heavily on bank loans.
Even though there are hundreds of financial institutions in Hong Kong, top-tier banks like Citibank and Huifeng Bank remain the top choices for most borrowers.
So in fact, Citibank wasn't short of clients seeking loans.
Of course, someone like Lin Haoran, taking out a HKD 3 billion loan in one go, probably set a new record for Citibank's Hong Kong branch.
This clearly showed how highly Citibank regarded Lin Haoran.
This might also be due to Chairman Walter Wriston's long-standing interest in Lin Haoran, believing that Lin Haoran could become Citibank's most important long-term partner in the future — hence the goodwill gesture.
And Lin Haoran was more than happy to accept such goodwill.
"Yes, Mr. Lin. What are your thoughts on this 10% rate? If you have any suggestions, I can try to submit a request to our U.S. headquarters.
But please understand, this is already a very preferential rate. In the past six months, not even our top clients have received a rate below 13%.
If not for the Chairman's personal approval, I would not have the authority as a branch manager to offer such a low rate," the branch manager explained, thinking Lin Haoran was still dissatisfied with the rate.
"No, you misunderstood. I'm very satisfied with this rate. Let's proceed with the contract based on this rate. I've brought 30% of Land Group's equity to use as collateral temporarily — that shouldn't be a problem, right?" Lin Haoran replied with a smile.
In fact, for a HKD 3 billion loan, an average entrepreneur would need to pledge shares worth at least HKD 5 to 6 billion as collateral.
But Lin Haoran had already discussed this with Walter Wriston the night before. He didn't intend to pledge all the equity he controlled in Land Group, so he decided to pledge an equivalent portion. After some hesitation, Walter Wriston agreed.
That was because Walter Wriston recognized Lin Haoran's ability to generate wealth.
This young Chinese businessman had made over a billion U.S. dollars trading gold futures — even someone as seasoned as the Citibank chairman had been stunned.
Then, Lin Haoran continued acquiring famous enterprises in Hong Kong, further impressing Walter Wriston.
So he ultimately chose to trust Lin Haoran's repayment capability, and approved the loan against only 30% of Land Group's shares.
"Of course. Let's proceed with the loan process. I've already printed the contract. I'll bring it over for you to review. If there are no issues, we can sign it immediately. Once signed, I'll contact our U.S. headquarters and the funds will be transferred to your account within two hours," the branch manager respectfully said.
The branch manager of Citibank's Hong Kong office was also Chinese, and had worked with Lin Haoran several times before — they were quite familiar with each other.
Even for this experienced manager who had weathered many storms — including a stint as a branch manager in New York — handling such a large loan personally was rare.
And now that even Chairman Walter Wriston valued Lin Haoran so highly, the branch manager was showing him even more respect.
Lin Haoran carefully reviewed the loan contract and found no issues. He then had the legal advisor from Huanyu Investment, who had come along to assist, go over it several times as well. After confirming there were no problems, Lin Haoran signed the contract with the branch manager.
"Mr. Lin, a pleasure doing business with you. I'll now fax the contract to the U.S. headquarters. Once they finish reviewing it, the funds will be transferred to your account shortly!" the branch manager stood up and smiled, shaking Lin Haoran's hand.
"Great. I trust in your efficiency. In that case, I won't wait here. I have other matters to attend to. Once the funds are transferred, you can just page me on my beeper," Lin Haoran nodded and smiled.
He still had many things to deal with. Since the loan was already approved — and although the funds hadn't arrived yet — given Citibank's credibility and his relationship with the bank, Lin Haoran had full confidence and saw no need to wait around.
With his bodyguards, Lin Haoran once again got in the car and headed toward the nearby Huifeng Bank headquarters.
Now that the loan was secured, it was time to proceed with the most important task — fully privatizing the Land Group.
(End of chapter)
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