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Kit
Menkin’s Leasing News www.leasingnews.org
Thursday, February 21,2002 Headlines--- First On Line Associations Newsletter-NAELB Leads the Pack
Tyco's lending unit secures $1.2 billion in financing to pay off debt
Comdisco To File Reorganization Plan by April 15, 2002
Fitch Ratings: 4Q Rating Actions Reflect Economy's Weakness
Feds Approve BancWest-United California Bank Transaction
Barry Rose Reminisces about the Good Old Days
What is a “Funding Retreat”—Joe Woodley Knows
Special Counsels Win-Lose-Tie Record
Official January 2002 Housing Report
What is E.L.A.? ###
Denotes Press Release
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( We promise you won’t want to miss this onet ) Not
only do they have an active “Listserve,” where members can
communicate with
each other, ask for assistance or advice on specific applications or
problems, but
they are the first leasing association with their Newsletter on line: Here
is a special preview: http://64.82.65.38/newsletter/conference.htm This
is for members only. To join, go to www.naelb.org
CONCORD,
N.H. – Tyco International Ltd.'s lending unit has secured $1.2
billion in financing backed by accounts receivable to pay off its maturing
debt. CIT Group
Inc., formerly called Tyco Capital, said the effort is part of a plan
to strengthen its financial position and diversify its funding sources.
CIT said
Wednesday it secured its financing from J.P. Morgan & Chase Co.,
Citibank N.A. and Credit Suisse First Boston. CIT said
it also expects to sell securities backed by home-equity loans within
a few weeks. The company promised earlier this month to raise $3 billion
to pay off maturing debt. The move
didn't placate analysts. "Using
receivables to secure a loan I think is not good," said Albert
Meyer, an analyst with David W. Tice and Associates in Dallas. "It
certainly is a last resort. That's like crying, 'Fire!' in a crowded
theater." Tyco, based
in Bermuda but run from Exeter, N.H., has said previously it plans to
sell or spin off the lending unit within the next few months. Tyco's
stock has been battered in recent weeks amid nagging questions about
the company's accounting practices and cash flow. Tyco in
early February tapped its credit line to repay short-term corporate
debt. The move followed Tyco's announcement in January that the conglomerate
is breaking up into four companies. Brad McGee,
a Tyco executive vice president, said the financing plan will benefit
CIT. "Many
times secured borrowing is at a cheaper rate, and it also allows them
to diversify their lending sources and allows them to diversify their
capital base," McGee said by telephone from Bermuda, where Tyco
is holding its annual shareholders meeting. Shares
of Tyco closed at $28.75 a share on the New York Stock Exchange Wednesday,
but were down 5 cents in extend trading. #######################################
############################## Comdisco
To File Reorganization Plan by April 15, 2002
ROSEMONT,
Ill Refined
Reorganization Plan Will Run Off Ventures Business Over
Next Three Years President
& Chief Operating Officer Michael Fazio Leaves Company Comdisco,
Inc. (NYSE: CDO) announced today that it has determined to run off its
Comdisco Ventures portfolio over the next 36 months and therefore will
refine its proposed plan of reorganization accordingly. As previously
announced, the Company is focused on filing its plan of reorganization
by April 15, 2002. The plan will address its core IT, Healthcare and
Telecom leasing assets in Europe and North America. Comdisco
also announced today that Michael A. Fazio, president and chief operating
officer, has left the company. Mr. Fazio joined Comdisco as executive
vice president and chief financial officer in July 2001, shortly before
the Company's Chapter 11 filing. He was named president and COO in September
2001. "We
have made tremendous progress over the past several months, as the Comdisco
board has explored a wide range of alternatives and implemented asset
sales and taken other appropriate actions to provide value for our stakeholders,"
said Norm Blake, Comdisco chairman and chief executive officer. "Michael
Fazio played an instrumental role in this process and we greatly appreciate
his many contributions. At the same time, we understand his desire to
move on to new challenges at this time and wish him well." Since
its voluntary filing for reorganization under Chapter 11 of the U.S.
Bankruptcy Code in July 2001, Comdisco sold its Availability Solutions
business to SunGard in November, 2001, received Court approval to sell
its Electronics and Laboratory & Scientific equipment leasing businesses
to GE Capital's Commercial Equipment Financing unit in January, 2002,
and received Court approval for the sale of substantially all of its
North American IT CAP services contracts to T-Systems Inc. in February,
2002. The GE and T-Systems Inc. transactions are expected to be completed
by the end of the first quarter of 2002. Comdisco, Inc. and 50 domestic
U.S. subsidiaries filed voluntary petitions for relief under Chapter
11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the
Northern District of Illinois on July 16, 2001. The filing allows the
company to provide for an orderly sale of some of its businesses, while
resolving short-term liquidity issues and enabling the company to reorganize
on a sound financial basis to support its continuing businesses. Comdisco's
operations located outside of the United States were not included in
the Chapter 11 reorganization cases. All of Comdisco's businesses, including
those that filed for Chapter 11, are conducting normal operations. On
February 14, 2002, the U.S. Bankruptcy Court for the Northern District
of Illinois approved the company's request for an extension of the exclusive
periods during which only Comdisco may file a plan of reorganization
and solicit acceptances for that plan. These periods, which had been
scheduled to expire on March 15, 2002, and May 15, 2002, have now been
extended to April 15, 2002 and June 15, 2002, respectively. The company
has targeted emergence from Chapter 11 during the first half of 2002.
About
Comdisco Comdisco
(www.comdisco.com) provides technology services worldwide to help its
customers maximize technology functionality, while freeing them from
the complexity of managing their technology. The Rosemont (IL) company
offers leasing to key vertical industries, including semiconductor manufacturing
and electronic assembly, healthcare, telecommunications, pharmaceutical,
and biotechnology. Through its Ventures division, Comdisco provides
equipment leasing and other financing and services to venture capital
backed companies. CONTACT:
Comdisco
Mary
Moster, 847/518-5147 mcmoster@comdisco.com
URL:
www.comdisco.com ####
################################################# ############ Fitch
Ratings: 4Q Rating Actions Reflect Economy's Weakness
NEW
YORK--Rating actions by Fitch Ratings during the fourth quarter of 2001
were profoundly negative in the corporate and financial sectors, while
commercial mortgage-backed securities (CMBS) and residential mortgage-backed
securities (RMBS) led structured finance to a positive finish, according
to a new report published today by the rating agency. Global
corporate finance led the field in downgrades with 88, as compared to
a meager 11 upgrades in the sector. Among those credits downgraded,
a disproportionate amount fall under the energy and telecom subsectors,
the likes of which included Enron (U.S.), MetroGas S.A. (Argentina),
and Carlton Communications (UK). No
credits were immune to the consequences of accounting questions raised
in the Enron aftermath, including other global power credits and corporations
lacking energy market connections,' said Charlotte Needham, Associate
Director, Fitch Ratings. 'The magnitude of these concerns is likely
to dominate the credit markets story line in 2002.' Within
the global finance sector, which includes coverage of insurance companies,
banks and securities firms, as well as finance and leasing companies,
the ratio of downgrades to upgrades equaled 3 to 1. A
copy of the Fitch Ratings report, 'Rating Actions in Fourth Quarter
Reflect Continued Weakness in the Economy' is available on Fitch's web
site at www. Fitchratings.com' or by contacting Market Services at 1-800-853-4824. ####
################################ ############ BancWest-United
California Bank Transaction Approved by Federal Reserve
SAN
FRANCISCO and LOS ANGELES, / -- BancWest Corporation, a subsidiary of
BNP Paribas, announced today that the Federal Reserve Board has approved
BancWest's acquisition of United California Bank from UFJ Bank Ltd.
of Japan. United California Bank is the largest Los Angeles-based bank
with assets of $10.5 billion and 115 branches throughout California.
The
parties expect the $2.4-billion cash transaction to close during the
first quarter, subject to approval by the California Department of Financial
Institutions. Following
the acquisition, BancWest expects to have $34 billion in assets and
serve 1.5 million customers from more than 350 branches in California,
six other Western states, Guam and Saipan. United California Bank branches
will become part of Bank of the West, a BancWest subsidiary, which will
have $15 billion in deposits within California, ranking fourth in bank
deposit market share in the nation's most populous state. About
United California Bank United
California Bank ( www.unitedcalbank.com ) is the product of last year's
merger of Sanwa Bank California and Tokai Bank of California. The parent
company of United California Bank is UFJ Bank Ltd., which was created
in Japan in January in the merger of The Sanwa Bank, Limited and The
Tokai Bank, Limited. About
BancWest BancWest Corporation ( www.bancwestcorp.com ) is a bank holding company with assets of $21.6 billion. It is headquartered in Honolulu, Hawaii, with an administrative headquarters in San Francisco, California. Its principal subsidiaries are Bank of the West (193 branches in Northern and Central California, Oregon, New Mexico, Nevada, Washington state and Idaho) and First Hawaiian Bank (56 branches in Hawaii, two in Guam and two in Saipan). About
BNP Paribas BNP
Paribas ( www.bnpparibas.com ) is a world leader in banking and financial
services, offering retail banking and financial services (consumer credit,
leasing, e-brokerage, insurance, car fleet management, etc.) to millions
of individual customers and corporations mainly in France (2000 branches),
Europe, the United States, Mediterranean basin and Africa. Headquartered
in Paris, France, it has one of the most extensive international networks
in the world with offices in 87 countries. Active in all major financial
centers, and providing services to large corporations and institutions,
BNP Paribas enjoys key positions in Corporate and Investment Banking,
Private Banking, Asset Management and Securities Services. With total
assets of $723.6 billion (EUR 851 billion) and shareholders' equity
of $19.8 billion (EUR 23.3 billion) at June 30, 2001, BNP Paribas is
the Number 1 listed bank in France and Number 2 listed bank in the Euro
zone. ###
################################# ###################### ------------------------------------------------------------------------------------------------------- 8:02pm
February 20 2002 Continuing
in the month/day format, don’t
forget to add to your list:: 03:30
03/30 0330 02:20
02/20 0220 01:10
01/10 0110 the
first list 1001
1001 1001 (digital clock) 11:11
11/11 1111 12:21
12/21 1221 20:02,
20/02, 2002 21:12
21/12 2112 Howard
Loomis, CPA hloomis@ptlr.com ------------------------------------------------------------------------------------------ Barry
Rose Reminisces about the Good Old Days GE
now is no different than the major banks in the 90's. My wife was a
bank employee
for 15 years (same bank), 24 years total. Each time the name on the sign
changed, the staffing decreased. Bank managers were given a salary cap &
told to 'make it fit'. Although we know it is insane to cut loose your most
valuable (i.e. experienced & loyal) employees, it came down to just body
count. I need 'x' people to man the guns. I 'retired' her 6 1/2 years ago,
because the stress was killing her, and now she's a happy stay-at-home mom
for our 3 cats. Now,
I suspect the same thing is happening with our contemporaries in the
leasing business. How many are now finding stay at home jobs, or tightening
their belt? These are times of great opportunity, but the stress to
produce is certainly taking its toll on the survivors. Sooner
or later, the pendulum will swing back to where the customer and the employee
are priceless. Perhaps more money managers will come to understand that
long-term earnings growth comes from stable companies, who have their priorities
in order, not acquisition companies who slash & burn for the sake of
short-term gain. I
came on board here at AXIS Capital 2 years ago, after 16 years as a
credit manager
for a manufacturing company that had a self-funded lease portfolio of
(at one time) $45 mil with an additional 2200 rental frame machines
out. Plus,
in the early '90's, I managed a captive for Dover Corp. called Dover Industries
Acceptance. That is, until the Associates got tired of us kicking
their backsides and made Dover a godfather offer for the $31 mil portfolio.
They
wanted to pursue Dover Elevator, Davenport, Heil, Chief Automotive
Systems, Rotary Lift (among others) without having to compete with
captive rates. Exit 7 good people on the street. Five years later my employer
sells off our portfolio because earnings that year were slim (VERY short-term
thinking), so I found something else to do. It
is a great education, getting out of the captive arena into the 'real world',
and I'm really enjoying it. I work for a small, family owned leasing company
with 15 employees and **** mil a year in fundings. We have our own warehouse
lines, front & back office, and all of the headaches that make this
a great business to be in. Since we are a vendor-driven company, and have
only a handful of brokers, it is enlightening for me to listen to broker
comments. We
have a great industry, and we need to have both the bad and the good
news to help us
all keep our attitudes in balance. I hope that we never stop appreciating a
good boss & working environment, and never stop feeling pain for
those who don't
have that stability. I
look forward to your Leasing News every morning. Again, keep
up the good work & keep looking for the "good news" too. Barry
Rose Operations
Manager AXIS
Capital Inc. _________________________________________________________ What
is a “Funding Retreat” Kit
- what are the purposes of funding retreats? BW Bill
Waitz billwaitz@email.msn.com (
I asked Joe Woodley of the United Association of
Equipment Leasing to respond, and promised him
we would then plug his Friday Funding Retreat. editor ) Bill
Kit referred me to you to address the question of the purpose of the
funding retreats. The
United Association of Equipment Leasing ( UAEL) choose to hold three
of these meetings this year. (western region, central, and eastern.) Input
from members helped designate the cities. Perhaps the name of the meetings
is a throwback to the past when the Western Association of Equipment
Leasing (WAEL), prior to American Association of Equipment Leasing (
AAEL) hosting their initial annual funding retreat in Chicago, picked
regional cities to put funding source/bank members together with originator
type members. Many
enduring relationships were formed. Today
some of that original concept remains while the forum is expanded to
address the existing economy and the players prevailing. Industry interaction
is the byword for these meetings with a focus on networking, education,
and maintaining an observant view of the continuing changes to our industry.
We
expect close to 150 attendees from all aspects of the equipment leasing
business and hopefully we can help jumpstart 2002. Please
contact me with any further concerns.
Joe Woodley
CEO ,UAEL.
joe@uael.org Tomorrow: Friday,
February 22, 2002 COSTA
MESA, CA
WESTIN SOUTH COAST PLAZA
686 Anton Boulevard
Costa Mesa, CA 92626
(714) 540-2500
Note: Free parking
available at the
South Coast Plaza
Shopping Center
(walk over the bridge next
to Scotts restaurant) PROGRAM 7:45am Registration
and Appointment Sign-ups 8:00am-8:45am Town
Hall Meeting
UAEL Leadership comes to the Members. What can
UAEL do for you to help you succeed? Also, an
over-view of current industry trends. 9:00am-12:00pm One-On-One
Appointments
Meet eye-to-eye with Funding Sources and Service
Providers. Build strong relationships with the
people who can meet your needs in 2002. 12:00pm-1:00pm NETWORKING
LUNCHEON
Mix and mingle with Funding Sources,
Service Providers
and your fellow Brokers/Lessors over lunch. 1:15pm-2:45pm EDUCATIONAL
WORKSHOPS TIMEVALUE
SOFTWARE TRAINING TimeValue
Software publishes TValueTM, the industry standard for amortization
software. Learn how to use TValue to structure leases with advanced
payments, skip payments, residuals, and more. You will learn the new
leasing specific features of New TValue Version 5. The new release
of TValue
5 will be available at a special UAEL price for all attendees. CAPITALSTREAM
ADVANTAGE TRAINING Making
the Most of Your Automation Investment. A
refresher course on CapitalStream Advantage. Jim Buckles from Preferred
Broker
Solutions will instruct on best practices methodology for using System
1 (2.5) and CapitalStream Advantage. Topics include Contact Management, CBR
Requests, Doc Management, Broadcast Faxing & Reporting. HUMAN
RESOURCES TRAINING You've
hired Leonardo daVinci, Napolean Bonapart, and
Joan of Arc to work for your company. Trouble is, they
aren't performing as expected...Why does this happen? Because
being a genius or having a reputation that precedes you
doesn't guarantee job fit! 3:00pm-4:30pm EDUCATIONAL
WORKSHOPS (Repeated
for your maximum involvement) UAEL
Member $125 Non-Member
$150 Additional
Employee for Member $80 Additional
Employee for Non-Member $100 Additional
Employee for Exhibitors $75 per event Non-Exhibiting
Funding Source/Supplier - one event at Regular Registration $125
Non-Exhibiting
Funding Source/Supplier - subsequent events $450 per event At
the Door Registration UAEL
Member $150 Non-Member
$175 __________________________________________________________________ Special
Counsels Win-Lose-Tie Record By
Associated Press A
look at some independent counsels and their investigations: Arthur
H. Christy, appointed in 1979 to investigate charges that Hamilton Jordan,
chief of staff to President Jimmy Carter, used cocaine. No indictments.
Leon
Silverman, appointed in 1981 to investigate charges of Mafia ties to
Raymond J. Donovan, President Reagan's labor secretary. No indictments.
Jacob
A. Stein, appointed in 1984 to investigate charges of financial improprieties
by Attorney General Edwin Meese III. No indictments. Whitney
North Seymour Jr., appointed in 1986, won perjury conviction of Michael
K. Deaver, Reagan's deputy chief of staff. Lawrence
E. Walsh, appointed in 1986 to investigate Reagan administration's sale
of weapons to Iran and diversion of profits to Nicaraguan rebels. Obtained
convictions, some overturned on appeal; others led to pardons by former
President Bush. James
C. McKay, appointed in 1987, won conviction of Lyn Nofziger, Reagan's
White House political director, for committing ethics violations in
lobbying later in his career. Conviction overturned on appeal. Robert
B. Fiske Jr., Kenneth Starr and Robert Ray, for an inquiry opened in
1994 into President and Hillary Rodham Clinton's Whitewater land deal,
and later expanded to other issues. Investigation led to the president's
impeachment for perjury and obstruction stemming from his relationship
with Monica Lewinsky. The Senate acquitted him. Donald
C. Smaltz, appointed in 1994, won an indictment of former Agriculture
Secretary Mike Espy, on charges of receiving gifts and entertainment
from companies or organizations regulated by his department. Espy was
acquitted; eight others pleaded guilty or were convicted of various
charges. At Espy's request, Clinton granted seven pardons and a commutation.
David
M. Barrett, appointed in 1995, won the indictment of former housing
secretary Henry G. Cisneros on charges he lied about payments to a former
mistress. Cisneros pleaded guilty to a misdemeanor and was fined $10,000.
His former mistress, Linda Jones, served nearly 18 months for conspiracy,
bank fraud, money laundering and obstruction of justice. Clinton pardoned
Cisneros and Jones. Last July, with Barrett still focusing on others
in the case, an appeals court panel said it did not have the authority
to terminate the investigation. Carol
Elder Bruce, appointed in 1998 to investigate whether Interior Secretary
Bruce Babbitt lied to Congress about his role in rejecting a proposal
from a group of Wisconsin Indians for a casino. No indictments. Ralph
I. Lancaster Jr., appointed in 1998 to investigate accusations that
Labor Secretary Alexis Herman engaged in influence peddling and solicited
$250,000 in illegal campaign contributions. Herman was cleared. A Singapore
businessman was indicted for making illegal contributions to the Democratic
Party. John
Danforth, appointed special counsel in 1999 to investigate government
conduct in the raid on the Branch Davidian compound near Waco, Texas,
in 1993. Danforth absolved the government of wrongdoing. A former government
prosecutor was indicted on federal charges of obstructing the investigation.
He pleaded guilty to withholding information and was sentenced to two
years' probation.
( This is printed here as Associate Press released this several days
ago, and
it did not appear in the newspapers I read daily. We get all this
talk
that someone is going to do something, and history shows us the above.
editor )
What is E.L.A.? Equipment
Leasing Association Equipment
Leasing Association of America 4301
N. Fairfax Drive, Suite
550, Arlington,
VA 22203-1627 PH:
703/527-8655 FX:
703/527-2649 alt
FX: 703/522-7099 Fax
on Demand: 503/402-1338 E-mail:
E-mail Addresses The
largest, and perhaps the most politically influential leasing association,
backed by all segments of the leasing industry, is the Equipment Leasing
Association. Their dues reflect a professional, well-run and managed
association with the most meetings, the best equipment leasing website
on line, legislative advocates in Washington, D.C., also available to
many states, top rated conferences, and is very sophisticated. It also
has the largest number of members, estimated at about 873 as of December
31, 2001. There is something for every segment of the leasing industry
and many benefits to growing leasing companies and leasing company executives. It
should be noted that the ELA conference attendance has always been "outstanding",
their legislative involvement is not paralleled in our industry, and
their web site, with its full and always current information, is the
best leasing industry
web site, no competition. In an internet study we are conducting on finding
leasing industry jobs on the internet, we have several who told us they found
jobs using the ELA web site. Several others had recruiters call them, but
at ELA, they were successful on line. If you have not visited it, you
should: www.elaonline.org $0-10M
- $1200 $10-20M
- $2200 $20-50M
- $3200 $50-100M
- $3900 $100
-250M - $4900 $250-500M
- $5900 *Over
$500M - $7500 (*Plus $750 per additional $100M) Maximum
- $30,000 Arranger
Membership is open to any companies fitting the following definition:
"companies acting as brokers, syndicators, investment bankers,
lessee advisors, lessor advisors, and or portfolio managers for the
purpose of purely generating fee income." The dues schedule is
based on the annual volume arranged. Based
on volume arranged previous year Less
than $10M - $1200 $10-50M
- $2500 $50-500M
- $5000 $500M
- 1B - $8000 Over
$1B - $12000 International
Members - $2000 per year Following
is the report for January housing starts. Carl
Villella, CLP Onyx
Capital Corp. 8150
Perry Hwy. Suite 211 Pittsburgh,
Pa. 15237 412-366-6100 412-366-9144
fax 412-980-6139
cell US
Department of Agriculture Official Housing Report—January Housing
Starts
Due
primarily to a 18.9% increase in multi family activity, housing starts
rose 6.3% in January to a rate of 1.678 million (SAAR), the highest
level in two years. Single family activity increased a healthy 3.5%,
to a SAAR rate of 1.345 million. Permits, an indicator of future
activity, were up 3.1% (1.706 million SAAR). Single-family permits
were up a very healthy 6.6%. Regionally, the South led the way with
a 14.4% increase while the Northeast was up 8.7%. The West was down
3.6% while the Midwest was essentially unchanged.
Analysis
and outlook: Mild weather certainly helped, but housing fundamentals
also remain strong. Mortgage rates, the key housing determinant, dropped
below 7% in January; consumer confidence continues to strengthen; inflation
at the retail (CPI) and wholesale level (PPI) is a non event despite
11 Fed rate cuts last year; and solid appreciation in house values is
encouraging homeowners to trade up on their equity gains. Some problems
remain: industrial production continues to languish, contracting in
15 out of the last 16 months; unemployment is approaching 6%; and business
investment remains weak.
The current thinking is that the recession may be over (4th Qtr. GDP was actually positive although only a meager 0.2%), but the recovery will be weak. That makes sense, because you can’t expect a strong recovery following a weak downturn. We need to be aware that the drivers of this recovery won’t be housing or the consumer because there is essentially no “pent up demand” in housing and the consumer never really seriously reduced spending. Furthermore, the manufacturing sector continues to suffer from overcapacity – the legacy from over investment in the last half of the 1990’s. Continuing weak offshore demand (exacerbated by the strong U.S. dollar) won’t come to the rescue either. Most companies will refrain from hiring new people until they are really sure they need them. That means unemployment will continue to increase through midyear at least, peaking near 6.5%, and income growth will slow, and that could dampen consumer spending. The key to better profitability in today’s business environment will be productivity, because pricing power will remain weak until overcapacity issues are resolved. Productivity was quite strong in the 4th Qtr., and is expected to continue improving through the year. What will turn the economy around this time? Business investment is expected to start improving later this year as inventory liquidation has just about run its course, and as businesses restock inventories, capacity utilization will improve, along with profitability, investment, and hiring. In this environment, housing should remain healthy, although most analysts feel a modest pull is in the cards. The latest NAHB forecast (January 30), calls for 1.594 million starts this year (down from 1.606 million in 2001), with 1.263 million single-family starts (compared with 1.275 million in 2001). Housing won’t lead the recovery and it will not impede it either – it should be neutral. The main problem in housing will continue to be the “luxury home” category – fallout from continuing weakness in equity markets. www.leasingnews.org
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