aircannonsinc Chapter 131 Mortgage Loans
Chapter 131 Mortgage Loans
7:00 AM, Bangkok Oriental Hotel room.
Lingyun opened his laptop and logged into his U.S. securities account.
Yahoo stock holdings: 1300 million shares, cost price $3.8. Current market price: $12.6.
He called Sofia.
"Now clearing out my Yahoo holdings. 1300 million shares, limit price $12.6, to be completed today."
"Clear out all stock?"
"all."
"Understood. How should the funds be arranged?"
"After the sale, we will first repay the 5000 million yuan loan from Goldman Sachs, then repay the 200 million yuan loan to Zheng Bin plus interest. The remaining funds will be transferred to the capital account of the Singapore company."
"It will probably take about two days to settle the accounts."
"As soon as possible."
After hanging up the phone, Lingyun began to calculate.
1300 million shares × $12.6 = $1.638 million.
After deducting the initial capital of 5000 million and Zheng Bin's 200 million plus interest, approximately US$1.11 million remains.
enough.
Zhao Hu knocked on the door and came in, carrying breakfast.
"Mr. Ling, what's today's schedule?"
"Go to the bank."
At nine o'clock in the morning, the two arrived at the headquarters of Bangkok Bank.
The building is very grand, with marble floors and strong air conditioning.
The appointment was with Vice President Somchai. He was in his fifties, wearing a dark suit, and was waiting for them in the conference room.
"Mr. Ling, welcome." Song Cai spoke fluent English.
"President Songchai, I apologize for disturbing you." Ling Yun sat down.
"I heard you have a large investment plan in Bangkok?"
"Yes. Digital City, a total investment of five hundred million US dollars." Ling Yun handed over a copy of the letter of intent. "This was signed with the municipal government."
Songchai looked at it carefully, and his expression became serious.
"What brings you here today?"
"I need financing," Ling Yun said directly. "I have a US$100 million deposit in my Singapore company, and I would like to use this deposit as collateral to borrow Thai baht from your bank."
Songchai's eyes lit up. A deposit of one hundred million US dollars was a huge sum of money in 1997.
"Purpose of the loan?"
"The funds will be used for the initial construction of the digital city and the purchase of equipment. Some of the funds may be converted into US dollars to pay for international goods."
"the term?"
"Six months. Interest rate at market rate."
Song Cai pondered for a moment.
"Yes, but we need your proof of funds and a statement explaining how the money will be used."
"no problem."
Somchai called the credit department manager. The two discussed the matter in hushed tones in Thai.
Ten minutes later, Somchai said, "We accept the collateral. At the current exchange rate of 1:25, one hundred million US dollars can be loaned for 23.75 billion baht. The annual interest rate is 8%, with principal and interest to be repaid after six months."
"Can."
"A mortgage agreement and a loan contract need to be signed."
"Can it be completed today?"
"Please expedite the process, before 3 PM."
"it is good."
After signing the preliminary agreement, Ling Yun and Zhao Hu left.
Next, they visited five banks.
Bangkok Bank, Krung Thai Bank, Siam Commercial Bank, Bangkok Bank, Kasikorn Bank.
The process is the same: show proof of funds, sign a mortgage loan agreement, and borrow Thai baht.
The exchange rate offered by each bank fluctuates slightly, and the interest rate ranges from 7.5% to 8.5%.
We returned to the hotel at 4 PM.
Lingyun began to calculate the accounts.
A Singapore company account received US$1.11 million. Of this, US$1 million was used as collateral and was frozen.
Bangkok Bank: Loans of 23.75 billion baht.
Next, these Thai baht were exchanged for US dollars. At an exchange rate of 1:25, this amounted to 9500 million US dollars.
Then, the $9500 million deposit was used for a second round of collateralization.
With the same 95% collateral ratio, Thai baht was loaned out:
US$95 million × exchange rate of 25 × 9500% = 22.56 billion Thai baht.
Then convert this 22.56 billion Thai baht into US dollars: 9000 million US dollars.
Lingyun performed this operation multiple times, and in the end, he was left with $7 million in frozen funds and $6000 million in cash, plus a loan of 190 billion baht.
Zhao Hu watched from the side without saying a word.
Ling Yun typed the last number and looked up.
"Did you understand?"
"I understand part of it," Zhao Hu said. "They use deposits as collateral for loans, then use the borrowed money to deposit more collateral. It's like a snowball rolling downhill."
"Yes. This is called leverage," Ling Yun said. "The core is that banks recognize the value of our deposits. As long as the exchange rate is stable, this game can continue."
"What about the risks?"
"The risk is the appreciation of the Thai baht. If the baht appreciates, we will need more US dollars to repay the baht we borrowed. But if we predict the direction correctly and short the baht, we can make more money from its depreciation."
Zhao Hu thought for a moment.
"So we're betting that the Thai baht will fall."
"It's not a gamble," Ling Yun said. "It's a certainty."
Ling Yun stood up and walked to the window.
As night falls, Bangkok is brightly lit.
The city appears prosperous, but its foundations are crumbling.
The ratio of foreign debt to GDP exceeds 60%, and foreign exchange reserves are only over 30 billion US dollars, of which short-term foreign debt accounts for half.
The real estate bubble is severe, and the non-performing loan ratio of banks is rising.
The Thai baht's exchange rate system, pegged to the US dollar, is under immense pressure.
He knew that in a few months, the Thai government would run out of foreign exchange reserves and be forced to abandon the fixed exchange rate.
The Thai baht will plummet.
At that time, the 190 billion baht loan he had could be repaid with fewer US dollars.
The profits from shorting contracts would be astronomical.
Zhao Hu's phone rang. He answered it and said a few words in Thai.
"Mr. Ling, Mr. Chachai called and said that the mayor would like to invite you to a dinner party tomorrow night to introduce you to some business people."
Tell him I will be there.
"Yes."
"Also, book your flight to Kuala Lumpur for the day after tomorrow."
"OK."
Zhao Hu went to make a phone call.
The lever is fully loaded, the ammunition is ready, now, all that's left is to wait for the gun to fire.
He turned on the TV. Thai television was broadcasting economic news.
The news anchor said, "Thailand's economy is projected to grow by 7% this year, with foreign investment continuing to increase..."
Below the subtitles, the Thai baht exchange rate is displayed as 25 baht/US dollar, which is very stable.
But beneath the surface, turbulent currents surge.
Lingyun turned off the TV.
There's a banquet tomorrow, I'll be meeting a lot of people and saying a lot.
Keep smiling and project confidence.
He needs to convince everyone that he is genuinely here to invest in the digital city.
I truly believe that Thailand's economy will continue to prosper.
This is very important.
Because hunters always have to pretend to be friends.