Leveraged Lease. If, upon the sale of the Facility by the Partnership to the Owner Trustee in accordance with the provisions of the Loan Agreement, GE Capital exercises its option under subsection 5.8 of the Loan Agreement to cause the Owner Trustee to borrow funds to finance (or refinance) a portion of the purchase price of the Facility, the parties hereto agree to execute a supplement hereto to provide for such provisions as are customary and appropriate in respect of leveraged lease transactions.
Leveraged Lease. Leveraged lease is the same as the direct lease, except that a third party, the lender, is involved in addition to the lessee & lessor. The lender partly finances the purchase of the asset to be leased; the lessor turns to be a borrower. Difference between the Operating and Financial Lease Topics Operating Lease Financial Lease Definition Operating lease is short term lease used to finance assets & is not fully amortized over the life of the asset. A financial lease is the lease used in connection with long term assets & amortizes the entire cost of the asset over the life of the lease. Duration Short term leasing Long term leasing Cost The lessor pays the maintenance cost. Lessee pays the maintenance cost. Cancel & Changeable Cancelable lease & It is a changeable lease contract. Non-cancelable lease & It is not a changeable lease contract. Risk lessor bears the risk of the asset. The lessee bears the risk of the asset. Purchase At the end of the asset is hot purchasable. At the end of the contract, the asset is purchasable. Renew It is a renewable contract. It is not a renewable contract. Also called Service lease, short term lease, cancelable lease. A capital lease, long term lease, non-cancelable lease. So, from the above discussion, we can say that lease is a contract under which one party the lessor (owner) of an asset agrees agreed to grant the use of that asset to another, the lessee in exchange for periodic rental payments. The rent is a tax-deductible expense. Meaning of Securitisation: RBI in its circular on Securitization of Standard Assets, describes Securitization. “as a process by which assets are sold to a bankruptcy remote special purpose vehicle (SPV) in return for an immediate cash payment”. ADVERTISEMENTS: Securitisation can be defined as: “Acquisition of financial assets by any securitization company or reconstruction company from any originator, whether by raising funds by such securitization company or reconstruction company from qualified institutional buyers by issue of security receipts representing undivided interest in such financial assets or otherwise.” In such cases the cash flow from the underlying pool of assets is used to service the securities issued by the SPV. Let us try to understand it from a xxxxxx’x view. In the normal course assets like loans and securities held by banks/financial institutions are expected to yield a quantifiable stream of future income (e.g. EMIs etc.). However, since this income is yet to be reali...
Leveraged Lease. Under this arrangement, the lessor borrows funds from the lender and provides a part of the money to acquire the asset. The lessor services the debt out of lease rentals. Thus, there is third party (lender) in addition to the lessor and the lessee. The lender is usually a financial institution or a commercial bank. Leverage lease is used in case of very large assets such as a ship or an aero plane. Advantages: Leasing offers the following advantages:
Leveraged Lease. 18 1.47A Monthly Net Capital Amount . . . . . . . . . . . . . . . . . . 18 1.48 Moving Average Actual Cost . . . . . . . . . . . . . . . . . . 18 1.49 Net Distributed Cost . . . . . . . . . . . . . . . . . . . . . 18 1.50 Net Sales Price. . . . . . . . . . . . . . . . . . . . . . . . 18 1.51 Nitric Acid Specifications . . . . . . . . . . . . . . . . . . 19 1.
