Lease Pricing Hints

Helpful Pricing Hints

This handout will highlight common questions asked during the proposal/funding process regarding pricing. This will be updated on an ongoing basis, as necessary.

Yields- Yields need to correspond to what has been approved on Blue Memo. If showing spread over FTP on blue memo, rep needs to also show the equivalent spread over H15. Spread over H15 will be verified by pricing speacialist

RVI- Residual Value Insurance will continue to be collected on all transactions qualifying as operating from the Lessor’s perspective. Work with your Team Leader on ALL transactions requiring RVI prior to issuing a proposal. Please review email sent by Anna on 3/4/04

1st Amendments- When submitting InfoAnalysis pricing, complete Guar.Residual field. This will prevent the doc team from mistakenly booking transactions as Operating Leases (Lessor’s perspective).

1st Amendments (Renewals)- Renewals should ALWAYS burn down residual to zero. Renewal terms should also be priced equal to or higher than the effective pre-tax yield of the initial term.

Fees- Include ALL document fees in the InfoAnalysis pricing run. These fees should be collected up-front if possible.

Interim Rent- This should also be included in pricing run. Can be Daily Equivalent or Interest Only

Split-Tracs- Any unguaranteed residual risk needs to be approved by EMG. The only exceptions to that are deals under $500,000 in aggregate equipment cost when the matrix is used.

Residual Positions- Residual positions should always correspond to EMG approvals

EBO’s- Unless otherwise approved, EBOs should be priced w/ a minimum of 2pts upside

Prepayments- Unless otherwise approved, prepayment penalties should not be waved.

Depreciation- When/Which to use??

Criteria 30% Bonus Depreciation 50% Bonus Depreciation

Date Placed In Service After 9/10/01 & before 1/1/05 After 5/5/03 & before 1/1/05

Date of written contract Not before 9/11/01 Not before...