Usually offered by corporations and financial institutions (tax benefits available to individual lessors are more limited), in a leveraged lease
the lessor--which provides only 20% to 30% of the capital needed to purchase the equipment and the remainder is borrowed from institutional investor on a nonrecourse basis to the lessor--claims all of the tax benefits related to the ownership of the equipment and offers the lessee much lower lease rates when compared to single-investor leases [see, e.
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.
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
Mesa Air Group has completed leveraged lease
financing for two new Bombardier CRJ-700 aircraft with equity provided by GE Capital Aviation Services and senior and subordinated debt provided by DVB Bank AG and Citibank, respectively.
The aircraft leases are part of Whirlpool's leveraged lease
portfolio in discontinued operations.
Simply put, a leveraged lease
is a transaction where the lessor puts in a part (usually 20-40 percent) of the funds necessary to purchase the equipment and a third party lender supplies the remainder, hence the lessor's investment is leveraged with third party debt.
Integration of the Statement 13 leveraged lease
accounting with the overall deferred tax computation should be much simpler.
A leveraged lease
is a long-term lease in which a major part of the purchase price of the to-be-leased asset is financed by a third party.
Accounting: Netting, Tax Credits as Revenue, and Aftertax Yield Amortization
9m, excluding a one-time leveraged lease
portfolio tax gain of USD21.
Under the settlement, GE Capital has agreed to provide the airline with USD120m in debtor-in-possession financing, a USD360m loan for use after it emerges from Chapter 11, and USD350m of lease equity for the leveraged lease
financing of regional jet aircraft.