- 12-08-2009, 12:30 AM #1Registered User
- Join Date
- Aug 2009
Please tell me kids get accepted withOUT debentures :(
======ARTICLE FROM SCMP===============
School debenture prices on rise again - Buying a seat in class can cost you HK$3.7m
Liz Heron (SCMP) - Updated on Dec 06, 2009
When prices for international school debentures reached HK$3 million they were called crazy. Two years on, the cost of securing a scarce place in one of the city's elite centres of learning has soared to as much as HK$3.7million.
And rising second-hand prices for debentures are driving increases in the face value of new ones schools are issuing. At one school, the issue price has risen eightfold since June 2007.
Schools sell debentures - a form of long-term debt instrument - to parents and companies to raise funds for building works. Parents and employers buy them to jump the queue for school places.
"Many of our clients say: 'Our child has met the standard but they don't have a place'," said Wing Chan, manager of one agency trading debentures, Elite Membership Services. "But once they buy the debenture, someone will contact them and say there is a vacancy for them. That's amazing.
"If you ask the school, they will say that it's not guaranteed. But our experience is that it's almost 100 per cent. That's why there [are] not [many debentures] on offer at the moment. Otherwise the school can't arrange a vacancy."
Chan said she had one second-hand debenture for Chinese International School in Braemar Hill available at HK$3.6 million and two for Canadian International School in Aberdeen at HK$660,000 to HK$700,000.
Tony Chan, director of sales at another agency, Everfine Membership Services, said he had sold two or three Chinese International debentures in the past two years and had one available at HK$3.6 million.
Ken Lam, assistant sales manager at China Dragon Membership Services, said it had a debenture for Chinese International available for HK$3.7 million and one for the Independent Schools Foundation Academy for around HK$1.5 million.
Individual debentures are typically refunded when a child leaves the school, while corporate ones can be passed on to children of other employees - and some schools allow them to be sold on.
The ISF Academy in Pok Fu Lam took its cue from the second-hand market when it priced its new issue of corporate debentures at HK$1.6 million - believed to be a record for an international school. (The face value of Chinese International School corporate debentures is HK$600,000, though it has not issued any for six years.) When the academy first issued debentures, in June 2007, they cost HK$200,000.
Jo-Ann Seow, its vice-principal for development, said: "The prices are going up mainly because of the funding needs of the school. We have had to increase it because we realise we need to do a lot of capital works."
A survey of eight schools found three had increased the issue price of debentures since June 2007, though the ISF Academy's increase is the biggest by far.
The price of a corporate debenture at Singapore International School has gone up from HK$100,000 to HK$180,000, and that of French International School in Happy Valley from HK$97,000 to HK$110,000, in that time.
Prices are unchanged at Hong Kong International School in Southern district and German Swiss International School on The Peak, at HK$500,000 and HK$250,000 respectively. Neither school allows its debentures to be traded.
Discovery Bay International School has replaced debentures with a non-refundable, non-transferable premium levy that confers priority for admission. Its price - HK$300,000 - has not changed in two-and-a-half years.
Canadian International School, which advertised its debentures on its website in 2007 for HK$300,000, no longer states a price, saying rather that it will be "the price prevailing at the time of payment".
A spokeswoman for the school said it last issued debentures in 2004 at a price of HK$250,000, and that all debenture transfers had to be reviewed and approved by the school's governing board.
One mother seeking a school place for her four-year-old child, who asked not to be named, said: "These schools are allowing secondhand prices to spiral. I don't think this is a fair system. The system disadvantages parents who don't want to throw away HK$3.6 million on a debenture.
"Chinese International and Canadian International should look at other international schools who do not trade on the second-hand market and adopt a similar system."
Second-hand prices for Chinese International debentures hit HK$3 million in June 2007 and those for Canadian International reached HK$480,000, although the latter said at the time that the maximum transaction that had gone through for an individual debenture was for HK$400,000.
Hilary Don, sales manager for another debenture trader, China Dragon Membership Services, said in 2007: "The prices we are seeing at the moment or crazy." Everfine director Athena Wong Man-sze said at the time: "We were very surprised when the Chinese International School debenture reached HK$2 million."
Following the runaway price increases two years ago, Geoffrey Mansfield, chairman of Chinese International's governing board, wrote to the Sunday Morning Post saying it was studying a recall plan for its corporate debentures aimed at stopping the trade in them.
Last week Dede Huang, director of development and external affairs at the school, declined to say whether the plan had been put into effect.
"We do still approve the buying and selling of debentures on the secondhand market," she said.
"I do not know what the trading price is. But the terms of the debenture are that the school gets 20 per cent of the face value of the last issue price, which is HK$120,000, [for each trade]."
- 12-08-2009, 11:43 AM #2Registered User
- Join Date
- Apr 2003
- Hong Kong
I think children can get accepted into an international school without paying a debenture, but once accepted, they won't be admitted without paying for one. It's just an extra cost to factor in when you submit your application, along with school fees, capital levy, etc. For example, our son got accepted into SIS first, then we had to pay for a fixed, non-transferable debenture which will be refund when he leaves the school.
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