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February
13, 2001
Headlines---- CIT is Closed to Brokers!!! Official Brian Madison Leaving U.S. Mellon--also U.S.Mellon for Sale???? It is Official: GATX Buys El Camino Portfolio ( as we reported a month ago, world's largest independent leasing company is now ATEL Capital, San Francisco) Dana Corp. posts a fourth-quarter net loss-once a major player in leasing First Sierra: Announcement to be Made Late Thursday Greenspan "Sober" Message--Fed Ready to Act ( but really only affects 10% of bank business, tax cut appears necessary for economy. editor ) Rodi Throws the Gauntlet: "... keep charging those fees. Now that I think of it it's a great sales tool that I can use against you." Bob Rodi, LeaseNow eMarket Signs GMAC Broker Says, "Let's Stick to Major Issues": Survival How Much Will You Save: Pres. Bush Tax Plan aka www.turbotax.com Venturi Sticks Funder with $2 Million Loss--Who is it? Fitch Changes Rating on CIT and others ( bottom of report ) Netbank Gets NCR On Line Point Capital, San Francisco, Appeals NASDAQ De-Listing Arizona Cardinals Get New Stadium ( what the heck? It's a big news day, and this is important to all fans ). The Chronological List is Up-dated..... ( Black Love Day---see our signature message--- ) ----------------------------------------------------------------------------------------------- “Brian Madison Going to New Jersey?---Sorry I Can't Take You” Blues I have it on good authority that Brian Madison, president of Mellon US Leasing in San Francisco has given notice. Going back to New Jersey to join a Citicorp entity, presumably in leasing. Since Mellon US Leasing is officially for sale, they may not be able to fill this post. So that I may protect my sources, put me down at Name Withheld. ----------------------------------------------------------------------------------- First Sierra The Shadow Knows Thomas J. Depping has called a meeting of all employees for Thursday morning. If that is true, the announcement would probably be made on the stock board Wednesday. Mr. Depping then will be in the position to explain what it means--not the entire issue. Stay tuned. News on Thursday??? One Wag said the sale will not be to American Express, but Washington Mutual, and the delay was caused by waiting for today's new rating by Fitch: Fitch Affs Washington Mutual, Upgr Bank United Following Purchase
NEW YORK--(BUSINESS WIRE)--Feb. 13, 2001--Fitch, the international rating agency, affirms its ratings on Washington Mutual Inc. (WM) at 'A' and 'F1' following its acquisition of Bank United Corp. (BNKU). BNKU's ratings are upgraded to those of WM and are removed from Rating Watch Positive. Because BNKU was merged into Washington Mutual, Inc. and Bank United FSB will be merged into Washington Mutual Bank, FA effective at the close of business Feb. 12, 2001, the ratings for those entities have been equalized with those of WM and withdrawn. See below for a complete ratings list. The transaction, which was valued at approximately $2.2 billion, was financed through an exchange of stock and accounted for as a pooling-of-interests. BNKU brings WM scale in Texas, especially in Houston and Dallas/Ft. Worth where WM has had a modest presence since its acquisition of H.F. Ahmanson in 1998. BNKU has over 150 branches in Texas and $8.8 billion of deposits. In addition, BNKU adds approximately $26 billion in residential mortgage servicing to WM's already considerable franchise. Earlier this month, WM also completed the acquisition of the residential mortgage banking business of PNC Financial Services Group. In the aggregate, WM's mortgage servicing portfolio is approximately $300 billion, making it the 4th largest in the U.S. WM, with $194 billion in total assets at year-end 2000, is the largest savings institution in the U.S. and the 8th largest depository institution. The firm has enjoyed very good asset quality due, in part, to its focus on the residential mortgage business. WM has expanded through both acquisitions as well as de novo operations and continues to focus heavily on retail and residential mortgage banking and consumer finance. However, WM has been gradually diversifying and its franchise now includes a commercial banking group, which emphasizes products for small to mid-sized businesses and a moderate commercial real estate lending segment. WM's profitability has benefited from good efficiency measures (less than 50%), very low credit costs and good momentum in non-interest income. --------------------------------------------------------------------------------------------- CIT Is "Frozen" to Broker Business Our Sole Hold Out (Bill Schimmel Advantage Leasing Co.OKC, OK.ICTKID2@aol.com) was informed late yesterday afternoon the bad news: "Just got a call from my CIT rep and told me that they have put a "freeze" on all broker submissions., they are "reassessing" their broker business and would get back in touch with me when a decision is made on what they are going to do." ( Charlie Lester confirmed it to us first, and then we received many others, and sorry Bill, you were evidently the last to know. editor ) + + + I have confirmed with our Rep at CIT, Atlanta that they have let several people from that group go (as of last Friday), others in the group have been reassigned to different areas within CIT and that they are not accepting any new business from brokers at this time. Bob Skibinski Taycor Financial 310-568-9900, Ext. 12 --------------------------------------------------------------------------------------------- GATX Technology Services Completes $373 million Purchase of El Camino Resources' U.S. Information Technology Lease Portfolio ( We reported the pending news last year about the changes, we could not officilly confirm and then a very highly reliable source --I mean vhr--told us this last month. Today is it "official." It leaves A.J.Badt at Atel Capital, the owner of the largest independent equipment leasing company in the world. editor ).
SAN FRANCISCO, Feb. 13 /PRNewswire/ -- GATX Capital Corporation announced today that it has purchased the U.S. information technology lease portfolio of El Camino Resources, Ltd. The acquired assets will be integrated into the operations of GATX Technology Services making GATX one of the world's leading independent IT lessors. The purchase amount included $129.7 million in cash and the assumption of $243.1 million of non-recourse debt. The assets acquired consist of information management systems on lease to businesses across the U.S. The equipment includes network switches, communications systems, servers, desktop computers, printers and related equipment and software. These assets will be combined with the similar lease portfolio of GATX Technology Services and managed from its offices in Tampa, Florida. Ed Mihm, senior vice president and head of GATX Technology Services said, "We are excited about the scale of this acquisition, which will make GATX one of the world's leading independent information technology lessors. It strengthens our platform for growth in technology services and it diversifies our technology leasing investment with an increased proportion of midrange equipment. In addition, the majority of El Camino leasing sales professionals have joined the GATX Technology Services team. Also joining GATX are key professionals responsible for managing the lease portfolio. These additions allow us to expand our U.S. technology services network with seasoned professionals." Jesse Crews, CEO of GATX Capital Corporation, said, "This acquisition of technology assets and strong sales personnel positions us for accelerated growth in technology leasing to Fortune 1000 customers. This investment fits the overall GATX strategy of re-deploying financial resources into our higher growth, higher margin businesses." GATX also pursues information technology leasing through its partnerships with Lombard (Royal Bank of Scotland) in the U.K., Deutsche Leasing in Germany and OMNI Financial Investments Ltd. in Australia. GATX Capital Corporation is a wholly-owned subsidiary of GATX Corporation (NYSE: GMT), a unique finance and leasing company combining asset knowledge and services, structuring expertise, creative partnering and risk capital. GATX Corporation provides sophisticated leasing and financial services responsive to the specialized needs of a range of businesses. In addition to offering information technology leases, GATX specializes in railcar and locomotive operating leasing, aircraft operating leasing, venture finance, and financing solutions for customers in a diversity of industrial sectors, worldwide. SOURCE GATX Capital Corporation CO: GATX Capital Corporation ST: Illinois, Florida ----------------------------------------------------------------------------------------- Dana Posts 4Q Loss, Says It Has Eliminated 10,000 Jobs ( Once a major player in the leasing business ) Tuesday, February 13, 2001 1:15PM EST TOLEDO, Ohio -- Dana Corp. posted a fourth-quarter net loss, but earnings without items met lowered estimates, as further slowing in the automotive sector continued to hurt the parts supplier. Dana (DCN) also said job cuts to combat slack industry conditions rose to 10, 000 employees. A company spokesman said the number represents 13% of its total work force. The company's fourth-quarter net loss came to $84 million, or 57 cents a share, compared with break-even results a year earlier. Without charges of $86 million, or 58 cents a share, for downsizing, plant shutdowns and other items, the company said it would have earned $2 million, or one cent a share, matching the mean estimate of analysts surveyed by First Call/ Thomson Financial. The latest charges also related to a Venezuelan affiliate, integration expenses, and costs to exit several lines of business. The year-earlier quarter included charges of $144 million, or 87 cents a share. Results excluding these items weren't available. Fourth-quarter revenue fell 17% to $2.69 billion from $3.24 billion. Industry problems worsened in the fourth quarter, marked by continued irregular and reduced production schedules for light trucks and sport-utility vehicles, deterioration in the U.S. heavy-truck market, aftermarket softness and weakness of the euro, Dana said. 'While these are the same factors that affected us in the third quarter, the severity of production cuts and their impact on Dana were much greater during the fourth quarter,' Joe Magliochetti, Dana's chairman and chief executive, said in a written statement. Dana's quarterly report was slightly better than it had predicted last month. The company said at that time it would break even on an operating basis due to a weak North American automotive sector. Before the warning, analysts had been expecting Dana to earn 18 cents a share in the fourth quarter. In December, the company warned that its unit in Venezuela would report a significant loss for 2000. Analysts had been expecting earnings of 28 cents a share, according to First Call/Thomson Financial. Dana's job cuts and closure of 11 facilities employing 50 people or more are expected to improve its position in facing near-term challenges, the company said. Dana first announced rolling work-force cuts in October, saying at the time that it would reduce staff by 3,500 people in response to curr ent market conditions. Dana said reduced capital spending except for new-product support, lowered working-capital expenses, consolidated operations and supplier-cost reductions via Internet business should also improve performance. Besides Dana, other auto suppliers such as Tenneco Automotive Inc. (TEN), Delphi Automotive Systems Corp. (DPH) and ArvinMeritor Inc. (ARM) have also cut their work forces due to the slowing auto market, particularly in North America. For full-year 2000, Dana reported net income of $334 million, or $2.18 a share, compared with $513 million, or $3.08 a share, in 1999. Operating income for the year was $377 million, or $2.46 per share, compared with 1999 operating income of $678 million, or $4.07 a share. The mean estimate of analysts surveyed by First Call/Thomson Financial was for 2000 earnings of $2.43 a share. Sales fell 6% to $12.3 billion, the company said. ------------------------------------------------------------------------------------------ Greenspan Says Fed Is Prepared to Act to Prevent Further Economic Slowdown WASHINGTON -- Federal Reserve Chairman Alan Greenspan said Tuesday that consumer confidence remains strong enough to keep the economy growing, but warned that a recession can't be ruled out and he said the central bank is prepared to act 'more aggressively' than in the past to prevent one. Delivering a sober assessment of the U.S. economy in the Fed's semiannual economic report to Congress, Mr. Greenspan said that economic growth was close to 'stalling out' at the start of the year and the country still faces a large number of 'downside risks.' Mr. Greenspan cautioned that forecasters have great difficulty predicting when a recession might occur because downturns are often the result of unreasonable fear that overwhelm normal business and consumer-buying decisions. 'This unpredictable rending of confidence is one reason that recessions are so difficult to forecast,' Mr. Greenspan said in testimony to the Senate Banking Committee. 'Our economic models have never been particularly successful in capturing a process driven in large part by nonrational behavior.' Under the circumstances, Mr. Greenspan indicated the Fed intends to take no chances. Because businesses and consumers are reacting more quickly than in the past to the prospect of an economic downturn, he said, 'the Fed has seen the need to respond more aggressively than has been our wont in earlier decades.' Mr. Greenspan's comments are likely to bolster expectations on Wall Street that the Fed will cut its key federal-funds rate an additional half percentage point at its next meeting of policy makers on March 20. But it could alter expectations of how many more rate cuts will be needed after that. Futures contracts on the rate indicate investors expect the rate, now at 5.5% to drop as low as 4.75% by the summer. The Fed, which spent most of the last two years trying to keep the economy from growing too fast, is now fighting to ensure that growth doesn't stop altogether. The central bank in January cut interest rates by a full percentage point in two moves, the biggest rate reduction in a single month in Mr. Greenspan's 13-year tenure at the Fed. But since that time, Mr. Greenspan said economic conditions haven't deteriorated further, and suggested they might not. 'The exceptional weakness so evident in a number of economic indicators toward the end of last year, perhaps in part the consequence of adverse weather, apparently did not continue in January.'Moreover, he said, other indicators bode well for long-term economic growth. 'The prospects for sustaining strong advances in productivity in the years ahead remain favorable,' Mr. Greenspan said. Mr. Greenspan said the risk of a U.S. recession this year is low, adding that tax cuts would speed the country's recovery should it slip into a recession. 'In the event - and it is a low-probability event - that we not only go into a recession but stay there for an extended period of time - it is better to have had lower taxes than otherwise,' Greenspan told lawmakers. 'In short, it would be an insurance against a low-probability event.' In addition, Mr. Greenspan said, although the growth of corporate profits has slowed recently, business managers remain 'remarkably sanguine' about the long-term outlook. He cited one survey of about a thousand corporate analysts that showed that their optimism remained at a 'very high level.' He also cited signs for hope that the economy will emerge relatively quickly from the current weakness. He said the surge in productivity growth that began four years ago was continuing even as the economy slowed. Higher productivity is the key factor supporting rising living standards. He also said there is no evidence that the big jump in energy prices is causing inflation problems outside of that sector. The fact that inflation has remained subdued has allowed the central bank to move as fast as it has to cut interest rates to spur growth, Mr. Greenspan said. Mr. Greenspan said the Fed's top policy makers generally expect the economy to pick up steam later this year. The Fed's 'central tendency' forecast calls for a growth rate of 2% to 2.5% in 2001, Mr. Greenspan said. That's down sharply from the range of 3.25% to 3.75% the Fed was forecasting just six months ago, but it's more optimistic than the forecasts of many Wall Street economists. ------------------------------------------------------------------------------------------------ Bob Rodi Does Not Back Off Funders Charging Payoff Quote and Other Fees I have to reply to the comments on fee income. First of all let me say that I wasn't referring to normal fee income like documentation fees or late fees that are disclosed to the customer either during the sales process or as part of the closing process. In fact I condone any fee that is disclosed. As an example we follow a formula for early termination on our franchise transactions that goes from 5% to 1% and clearly discloses the cost to the customer of an early termination. What I object to are "suede shoe" fees that are added after the fact when the customer is in no position to question them or negotiate. What is the point of advertising the "lowest rate" if you then have to nickel and dime the customer with stupid fees for services that should be included in your normal course of business. If you have to resort to cheap tricks to make your nut then you (1) aren't managing your back office properly, (2) should be looking for ways to work more efficiently, or (3) looking for a new line of business. As for it being "amusing" that these types of programs will invite regulation you shouldn't be laughing to soon. It is exactly this type of nickel and dime conduct that angers the public and prods them to take action. This will be especially true as we move through a slow down and possible recession where your customers will be far less apt to "just pay" the fee and not argue. Would I rather see a funding source raise its price 25 bp than charge a ridiculous fee? You bet I would. I could easily use the time I save, not having to explain some fee that I had no idea was going to be charged, to go out and get a few extra customers who won't dicker over an extra couple bucks on the payment up front. In fact, keep charging those fees. Now that I think of it it's a great sales tool that I can use against you. Bob Rodi drlease@leasenow.com + + + More Comments from the Other Side: $25.00 for a payoff is reasonable. In my 13 years in the industry working for three of the largest companies, many customers would always call me wondering how to get a payoff figure or anyone to return their call. Even sales reps have a problem getting a payoff. If a company is to dedicate someone to handle payoffs, quote them immediately, most customers and brokers (at lease me)would think this is a good idea. Many complained when banks starting charging $5.00 to $10.00 for bank ratings. The banks that charge a fee usually have a 2-3 hour turnaround time. The banks that do not have a policy, are the ones that are difficult to work with. I will gladly pay a reasonable fee for a rating or a payoff. Now unreasonable fees are charged by lenders such as Orix. Several years ago, Orix's Houston office (now closed) charged a $1,000 fee for a subordination and then requested an additional payment from the customer before signing the subordination. So $25.00 does not seem unreasonable to me.
Craig Tillison craig@evergreenleasing.com ----------------------------------------------------------------------------------------------- More Compliments for Linda Kester Linda is truly a professional and Top Gun trainer in our industry. She is intelligent, bright and energetic. She is a breath a fresh air to the equipment leasing industry. Everyone who uses the telephone to close should take some time to listen to Linda's telemarketing seminar at a leasing conference or hire her privately and let her give a private seminar to your sales force. If you don't you are really missing the boat. <br> Sincerely, Michael Granieri Granieri Associates VP Marketing and Training </b>Granite63@aol.com --------------------------------------------------------------------------------------------- "Let's Stick with Major Issues..." Your newsletters are now full of info we brokers do not need. Lets stick to the major issues that affect our industry today, (1.) Tightening of credit parameters, (2.) Debt sources closing doors to new brokers (3.) Solutions and suggestions as to how to cope with "leasing today". How about info on a new debt source or a new player in the industry that is buying transactions aggressively? Information regarding who will be the next UAEL president is or how much association dues are running is worthless. These are trying times for the small and medium ticket broker, lets stick to information that is pertinent to the survival of equipment leasing. Mr. X
( not signed contact form ) Whoa!! Now!!! I personally don't read ALL the stories in any newspaper. I read several newspapers, and different sections, as I have different interests, just as you may have. Leasing News tries to serve the entire industry, not just one segment. If there is news that does not interest you, don't read it...Skip the article. Pass it by. If you are seeking advice, here is the best thing you can do in the year 2001. There is an excellent organization you should join called the National Association of Equipment Lease Brokers; www.naelb.org They are not only dedicated to your segment of the industry, but have an excellent program called "listserve" that allows members to communicate back and forth about problems, suggest sources for leases, share current information, talk about "super brokers." Leasing News strongly believe that every leasing person will benefit from joining and participating in a professional association. This is the best advice we can give. And you should care who the United Association of Equipment Leasing President is!!! They pay is terrible (none) and the time they put in is " above and beyond." The current UAEL president is, Chuck Brazier, who I sent deals into over twenty years ago when he was a Denrich. He is one of the nicest guys you will ever meet. I don't think he has a mean bone in his body. Chuck is very knowledgeable and his company Centerpoint works with brokers, wants more business, and you can learn a lot from an association with a leasing professional of the caliber of Churck Brazier. So if you know him, you might send him deals, and you might support all the volunteer work he does. We recommend professionals belong to more than one association. Education is very important, especially in these tightening credit times where money will be less available for all credits. You also should attend leasing conferences. Invest in your knowledge. What you are "selling" is your knowledge. The more you know, the better you will do. My advice is to join today. Get to know your colleagues, learn about the latest products, the latest funding sources, and learn more about your craft. Join. It is that simple. You will survive if you join and participate in a leasing association. end of lecture. editor ) P.S. Sorry for the amount of news today, but I don't control that--except perhaps for the Arizona Cardinal story.editor
----------------------------------------------------------------------------------------- Keystone Comments about AT&T---Fraud As published in a previous issue of Leasing News.Org, I believe Funder Fraud is the root of this industries recent problems. Broker and Funder Fraud have always been an issue but probably remains the same today as it was 5 years ago. AT&T is just another contributor to today's negative flux in of funding sources. Others I would like to name are: Granite (now FNF), Finvoa (became Greentree and then Conseco), Copelco, T&W Financial, Bank Vest etc.. I welcome anyone else to comment. As far as I am concerned, Funders are lucky to have brokers and would be better serv |