Most recently, he was with MetLife managing leveraged lease
and tax equity portfolio assets including commercial aircraft, rail, power plant, renewable energy, and commercial real estate.
This does not mean an investors should shell out a fortune to own a warehouse or buy a leveraged lease
on an Amazon bulk warehouse with the fixed seven to eight per cent returns while bearing the full risk of an industrial cycle downturn or interest rate hike.
Such payment models are commonplace when it comes to capital equipment, where leveraged lease
financing and other terms are a routine part of the acquisition process.
A leveraged lease
(a true lease) is similar to a single-investor lease (also called nonleveraged leases or direct leases) but more complex in size and in the number of involved parties--it involves a minimum of three parties with diverse interests: a lessee, a lessor, and a nonrecourse lender.
Both Deloitte and KPMG stated that they thought that leveraged lease
accounting for lessors should be discontinued even if the boards decided not to move forward on making other changes to lessor accounting.
Lastly, if HP purchased debt, it is worth noting that, in Frank Lyon Co., (10) a case involving a leveraged lease
, the Supreme Court reversed an Eighth Circuit decision and respected the lease in form, rejecting the IRS's contention that the transaction was truly a financing arrangement (debt instrument) for the lessee.
"After vigorously marketing their assets for almost a year and soliciting 58 potential buyers/investors, it is abundantly clear that, in the current economic environment and with the debtors complicated leveraged lease
structure, an out-of-court restructuring sale is not possible."
Cushman also recently finished a leveraged lease
for a Manhattan office building worth around $100 million, said Hwang.
The Alta project, supported by a 1,550-MW power purchase agreement with US utility Southern California Edison (SCE), is the largest investment in the North American wind energy sector and the first wind energy leveraged lease
to be placed in the debt capital markets, Vestas noted.
FASB has issued a staff position that requires companies to recalculate their leveraged leases
if there is a change in the timing of cash flows relating to income taxes generated by the leveraged lease
For illustration, let's consider a highly complicated, multiparty transaction: a large ticket leveraged lease
. Here, the lessor has leased $80 million of equipment to the lessee, borrowing 70 percent of the total cost from a third party lender.
Power Play: Banks represented underwriters in a $536 million leveraged lease
financing by the subsidiaries of Ahold USA Inc.