2003 April Issue

APRIL 2003
Funding Sources

FEATURES

Warehouse Lines Adapt to New Market Realities
By Michael C. Szwajkowski
This article covers how warehouse lines have evolved and their benefits to equipment lessors. It also provides practical tips from a lending perspective to help you identify the right capital source to provide the type of credit facility most suited to your needs. (Ref # FNF094)

Funding Source Perspective: A Turbulent State of Affairs
By Brian Bjella
Times have certainly changed, therefore we must change. Good times will be back, slowly we will all climb upon more solid ground. Let's not forget our history lessons of the past few years. By working closely together, instilling self-policing and doing the right thing - we will all have the opportunity for continued prosperity. (Ref # FNF095)

All the World's A Stage… Commercial Money Center Saga
By Andrew K. Alper
If "all the world's a stage", then the complex saga of CMC and its cast of investors, lessees, sureties, subservicers, sub-subservicers and bankruptcy trustee are characters in a classic tale of trickery and deceit. The following article should serve as a reminder to funding sources to be careful when acquiring leases and lease portfolios. (Ref # FNF096)

Large Bank Funding Landscape: Volatility Everywhere
By Scott Kiley
The state of the large bank funding market is extremely volatile. And while each organization will be mightily tested, the companies that approach the marketplace with a clearly defined deal appetite and credit standard are the companies most likely to succeed.
(Ref # FNF097)

Navigating the Waves: Funding In Turbulent Times
By Tim Talbert
Turbulent water is a good description of the funding environment for the leasing industry. Fortunately, there are ways to navigate the waves. The key is to develop significant funding relationships and improve your core competencies. Then, once your operations are in order, start looking for additional improvement. Sound like a lot of work? It is and it's the pathway to survive and thrive. (Ref # FNF098)

2003 World Aircraft Overview: The Business of Building Aircraft
By Richard Aboulafia
This overview is designed to provide a comprehensive look at the business of building aircraft. If it's manned, turbine-powered aircraft, it's included in this survey. The numbers are drawn from Teal Group's market and program forecasts, so this represents the top of the World Military and Civil Aircraft Briefing "forecast pyramid." (Ref # AIR030)

Lessors & Debt Liquidity: A Shallow Funding Pool
By S. Scott Gates
Lessors are facing one of the most difficult markets in years relating to finding debt liquidity. Currently the market presents various challenges and while liquidity is available, the borrower should expect to clear more hurdles. (Ref # FNF099)

Fitch Ratings: ABS Delinquency Directions
By Sara Grohl
Although the shaky economy and uncertainty surrounding businesses' appetites for capital spending confirm that risk in the equipment lease industry remains, equipment lease ABS investors can expect consistent to improving delinquency performance in securitized leasing portfolios throughout 2003, as the index remains far off its April 2000 peak of 7.59%. (Ref # CRD049)

Cooking The Books… The Fraud of the New Millennium
By Armand Lucarelli
Fraud is robbery without a gun and is only limited by the perpetrator's imagination. Executives will go to jail and investors will have lost billions of dollars. These events are in the news; what is not in the news is the proliferation of frauds committed by middle-market companies stealing millions from banks, creditors and investors. (Ref # FRD005)

Thinking Outside the Box… Innovative Approaches to Funding
By Loni L. Lowder
Funding in the current environment is challenging. This increases the need for all of us in the leasing industry to think outside the box to create new and innovative ways to fund lease transactions and mitigate risk in ways that maximize profitability and ensure lessor survival. (Ref # FNF100)

Venture Leasing Plus: Finding Flexible Solutions in a Wobbly Economy
By Norman H. Nelson
Providing funding to companies whether in a start-up mode or caught in a trough can be a source of satisfaction for funding sources. In the following article, Norman Nelson discusses new products that serve to foster growth for both funding sources and clients in a downturn economy. (Ref # FNF101)

COLUMNS

CAREER MOVES
Counteroffers, Interviewing & More
By Jim Pawlak
Gary writes: “I’m expecting an offer for a job similar to the one I have now. The reasons I am considering it are increased pay and better benefits. Since job content isn’t part of the decision, what should I do if my present employer counters the offer?” (Ref # JBS070)

DISPATCHES FROM THE TRENCHES
Revised Article 9: Failure to Comply Will Cost You
By Kenneth P. Weinberg, Esq.
As you know, the enactment of Revised Article Nine of the Uniform Commercial Code (the “Revised Article”) requires prudent lessors to learn new rules and to be aware of new risks. This article focuses on the new obligations and duties that the Revised Article places on lessors for which there is a statutory penalty of $500 in the event the lessor fails to comply. (Ref # LGL100)