2003 September Issue

SEPTEMBER 2003
Capital Markets

FEATURES

Operating Assets Securitizations: Merging Financial Disciplines
By Mark J. McGreenery
Operating Assets Securitizations demonstrate how the integration of both lease and corporate finance funding techniques can provide superior financing solutions for issuers, and higher value-added products for advisors, in those instances where an issuer's financing objectives require more than a traditional lease financing can offer. (Ref # SEC070)

Equipment ABS… Poised for a Brighter Future
By John N. McElravey, CFA
With increased issuance, improving credit performance and a strengthening economy, the equipment ABS sector seems poised for a brighter future for the balance of 2003. The following article traces some recent trends in this sector. (Ref # SEC071)

Collateral Management… In Good Times And In Bad
By Peter Otto and Larry Smircich
Collateral. In good times, it's the basis of a significant portion of the financings made in the U.S. Properly documented and monitored, it provides comfort to secured lenders and a framework in which the creditor community is able to prosper. In bad times, if everyone's homework was done properly, it will survive workouts, turnarounds and the bankruptcy process and allow secured creditors to retire their loans. (Ref # CRD058)

Back-up Servicing: Adding Stability to ABS Transactions
By Joe A. Andries
With the current levels of economic stress and increased scrutiny by rating agencies, investors and trustees are looking to back-up servicing companies to bring additional stability to ABS transactions. As these expectations of security increase, rating agencies have encouraged back-up servicers to provide advanced levels of protection. (Ref # SEC072)

FIN 46: A Conundrum Wrapped in a Puzzle
By Ruth A. Strauss
Since its inception in January of this year, even experts regard FIN 46 as a "conundrum wrapped in a puzzle". The following article answers some of basic questions that arise out of grappling with the twists and turns of FIN 46. (Ref # ACC024)

Securities Laws… Impact On Lease Documents & Structures
By Edward S. Grenville
If an equipment leasing transaction involves the offer or sale of a "security," it becomes subject to federal and state securities laws, and the jurisdiction of the SEC and state securities regulatory bodies. Therefore, lessors and lessees should be mindful of potential securities issues when structuring and documenting equipment leases. (Ref # LGL109)

Avoiding Pitfalls in the Securitization Market
By Patrick D. Regan
Securitization is not something that well managed, adequately managed leasing companies need to avoid. Success in this arena ultimately falls to the companies that use it as an efficient and dependable source of capital. (Ref # SEC073)

Dodging a Bullet - Final Tax Shelter Disclosure Regulations
By Robert L. Ash
Under the tax shelter disclosure regulations that the IRS rolled out in October 2002, lease transactions, which previously were not viewed as tax shelter transactions now can be characterized as "reportable transactions" subject to the regulations. Leasing industry members should consider the potential applicability of these rules to leasing transactions and be alert for future IRS guidance. (Ref # TAX049)

Residual Value Insurance… The Perfect "Complement"
By Paul Dean
In the following article, Paul Dean of Collateral Guaranty discusses the beneficial applications residual value insurance can provide to both lessors and lessees. Whether allowing for capital relief, providing sales accounting for manufacturers, or averting consolidation of SPEs, residual value insurance proves to be an tool that works for all players. (Ref # INS017)

Business Process Management… Balancing ROI, Scope & Implementation Risk
By John Voytko
Even for less adventurous firms, the timing is right to put Business Process Management (BPM) technology on your radar screen and start looking for potential pilot application opportunities. Understanding the nuances of the risks associated with BPM can improve your chances of success when the time comes. (Ref # TEC0136)

COLUMNS

CAREER MOVES
Proofreading Your Resume
By Jim Pawlak
The following excerpts from a reader’sletter points out the need to proofread yourcover letter and resume and not rely on spellcheck...

LEGAL WATCH
The Fight Continues Between Lessors and Bankrupt Lessees
By Andrew K. Alper
Counsel representing equipmentleasing companies are alwayslooking for cases that discuss avariety of issues that arise both in and outof bankruptcy. (Ref # LGL1010)

TOP GUN
The Many Faces of Financial Advisors
By Michael Granieri
Financial advisors come in a variety of shapes, sizes, and personalities. They believe they know everything about financing and especially leasing. Well fear not, there is a way to handle different types of financial advisors. There are four basic personality types of financial advisors in today’s marketplace and here are the formulas to convert these folks to interested listeners.

DISPATCHES FROM THE TRENCHES
No Windfall From Liquidated Damages
By Kenneth P. Weinberg, Esq.
This issue of Dispatches from the Trenches: (a) discusses the invalidation of liquidated damages provisions that purport to grant the lessor more profit than it was guaranteed to receive if the lessee fully performed; (b) reminds lessors to be careful when dealing with lessees so as to avoid waiving the lessors’ rights against the lessee after default; and (c) may prompt some lessors to see if the end of term notice periods intheir leases are consistent.