Why are the recovery rates of bank loans higher than bonds?
Lenders have a comparative advantage over bondholders in recovering their claims. There are factors that tend to result in higher expected recoveries of loans over bonds, includin...
Who are the key parties to a securitization?
The securitization process involves numerous parties in specialized roles for the creation and issuance of asset-backed securities. Besides the ABS buyers – investors, for securit...
When is a leased asset impaired? How is lease impairment recognized?
An impairment is a permanent reduction in the carrying value of an asset below its fair value (US GAAP) or recoverable amount (IFRS), which occurs when it is deemed improbable that...
When is a distressed firm restructured?
A restructuring operates primarily on the liabilities side of the debtor’s balance sheet by postponing liabilities and using the time gained to readjust the claims against the firm...
What ratios are used in lease underwriting?
Lease underwriting credit analysis includes financial ratios to assess the transaction collateral credit quality. Whereas equipment lease credit criteria are commonly limited to l...
What leases qualify as leveraged leases under US GAAP?
Leveraged leases have a separate accounting classification under US GAAP; IFRS does not have the concept of leveraged leases. Under US GAAP, a leveraged lease qualifies as an oper...
What leases are structured as nontax leases?
Operating leases for accounting purposes can be structured as nontax leases to allow the lessee to take advantage of the tax benefits of asset ownership while having off-balance sh...
What leases are structure as true leases?
Leases in the upper middle-ticket segment and big-ticket leases are also generally structure as true leases. The ability of lessors to claim the tax benefits of ownership is a key...
What kind of equipment is leased?
The BEA lists the following types of equipment in its publication “Relation of Private Fixed Investment in Equipment in the Fixed Assets Accounts to the Corresponding Items in the...
Vendor leasing is equipment lease financing offered by vendors through bank, captive and independent lessors to the end-user of assets in conjunction with the sale of their product...
