2003 October Issue

OCTOBER 2003
Fourteenth Annual Convention Issue

FEATURES

Accounting Issues in 2003…Adapting to Fast Pace of Change
By Bill Bosco and Cheryl Malecki-Pakhayev
FIN 45, FIN 46, EITF 01-08... Given the significant number of accounting changes in 2003, one point is clear - the leasing industry will continue to expend resources to adapt to the principles-based approach and to keep abreast with new regulations and the resulting implementation issues. (Ref # ACC025)

Phoenix Rising: IPO Market Returns to the Commercial Finance Industry
By Robert P. Rinek
Like the mythical phoenix that rises from the ashes with renewed youth and vigor, we are seeing the rebirth of the commercial finance industry and no story is more noteworthy than CapitalSource, Inc. In the following article, Robert Rinek discusses the particulars of this success story, which has been well received by the market. (Ref # CPR084)

Securitization Market: Down... But Not Out
By Felix Herrera
Approximately five years ago, the biggest challenge facing independent finance companies was to procure low-cost financing to fund their high origination volume. Today's challenge is managing deteriorating asset performance and developing more cost-efficient operations in response to lower business volume. (Ref # SEC074)

Investor Confidence… Independents' Pathway to Growth
By Doug Olson
An accurate assessment of the 2003 climate requires a good review of the cyclical trends of investment capital and the management practices of the independents. Understanding the interplay of these two elements and the resultant situation will be crucial to the survival and growth of the independent leasing company. (Ref # GEN019)

Syndications Solution: A Powerful Tool in Today's Financial Market
By Paul W. Frechette
As current economic times demand lessors to be creative in developing and maintaining customer relationships, lessors must find a way to satisfy client needs and manage asset portfolios and credit parameters. Syndications can prove to be a powerful tool in the equipment financing arsenal in furthering that goal. (Ref # SYN007)

From Optimistic Assumptions To Pessimistic Results… And Back Again!
By Jay M. Mudrick
In positioning themselves for future prosperity, lessors must analyze and understand what led to recent performance erosion, strategically evaluate ways to return to stronger financial standing, and understand all available tools as they enter a new period of financial opportunity. (Ref # INS018)

Pooled Aircraft ABS vs EETCs: Background & Structural Considerations
By Mark A. Heberle
Corporate credit of major U.S. airlines has deteriorated as a result of the market downturn caused by the events of September 11, 2001. In the first of a three-part series, Mark Heberle of Wachovia Securities, compares the enhanced equipment trust certificates (EETCs) of major U.S. carriers to pooled operating lease asset-backed securities (ABS) markets. (Ref # AIR031)

Fitch Ratings/QII 2003: ABS Delinquency Directions
By Sara Grohl
While the economy has languished, leasing companies, in particular, have been concentrating on their core markets, improving business models and strengthening underwriting standards. Results of these industry enhancements are evident from healthier overall portfolio performance and lower delinquency rates. (Ref # CRD060)

Equipment Repossession Index: New Tool for Mitigating Risk
By Edward Castagna
Nassau Asset Management has tracked equipment for several decades as a function of its nationwide remarketing operation. Recognizing the value its historic and current data holds for the equipment leasing and finance industry, the company has launched the NasTrac Quarterly Index (NQI), which reports on equipment types generating the greatest volume of liquidations. (Ref # EQM120)

Defining the Next Financing Era
By William J. Smith III
As we enter a new era, shaped by companies that are faster, more efficient and more flexible the business solutions employed will no doubt reflect those attributes. And, companies are finding that they must operate "on-demand" in many, if not all, for their operations.
(Ref # TEC0137)

Being the "Right" Financial Partner in Uncertain Times
By Tom Vasilakos
As the economic environment remains uncertain, companies will continue to seek financial services partners with the resources and innovative products to meet their needs. They will also look for providers who are dedicated to efficient and responsive customer service. In the end, equipment finance companies that meet these measures will be leaders in the industry. (Ref # LESS009)

COLUMNS

CAREER MOVES
Your Job Change Plan
By Jim Pawlak
Martene still has a job but she’s waiting for the ax to fall. She writes, “It’s only a matter of time. I want to know how to move on and not look back.” Start looking forward by developing four lists: (Ref # JBS075)

LEGAL WATCH
Third Circuit Rejects Casualty Loss Damages As Penalty
By Lesley Anne Hawes
The Third Circuit Court of Appeals has added to the limited body of published decisions construing and applying the provisions of Article 2A-504 regarding the enforceability of liquidated damages provisions in leases in bankruptcy cases. (Ref # LGL1012)

DISPATCHES FROM THE TRENCHES
Georgia Usury Laws & Other Cases
By Kenneth P. Weinberg, Esq.
This issue of Dispatches from the Trenches: (a) addresses usury laws in Georgia and highlights why lessors should be aware of limitations on the amount of interest which lenders can charge borrowers; (b) provides a couple of example cases where assignees of originating lessors seek recovery from the guarantors of the defaulting lessees; and (c) examines whether commitment letters constitute binding contracts. (Ref # LGL1013)