Kit Menkin’s Leasing News   Friday, January 18 ,2002


Headlines---- Association for Government Leasing and Finance Membership Up 37%
                            Sun Micro/GE--- Heller Financial-- Citi Medical "Inside Information"
                               Equipment Finance Journal Awards----Correction
                                  De Lage Landen Financial names Pete Connor Dir. Sales - Western Reg
                                      Streamlined Sales Tax---ELA Dennis Brown
                                         U.S. Housing Starts---December, 2001 Government Figures
                                       State-by-state cigarette tax rates
                                           New York's unemployment rate continues to climb

### Denotes press release



( Why U.S.Housing Government Report---great economic indicator, especially the conclusions: "The current thinking is for a slow and gradual recovery starting in the 2nd half. "The reasons for the delays are continuing weakness in the manufacturing sector - this won't change until capacity utilization (and profit margins) improves. When it does, stronger business investment will support better GDP growth and a better employment picture. " Housing is expected to pull back modestly this year, but the annual rate (SAAR) should remain healthy (latest NAHB forecast calls for 1.575 million starts in 2002 with 2.24 million SF starts). If there is a weak point to the housing sector, most analysts feel that weakness in the "luxury home" category will continue."

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Association for Government Leasing and Finance Membership Up 37%

Our dues are the same as last year and our year-end membership count is 343.
Jorie Lagerwey
Executive Assistant
fax 202.833.3636
(June, 2001 membership was 250. This completes the total count for the page, and we will start working on up-dating the section and writing an article about the various leasing associations. Editor)


Recent Membership Figures

Seems to me that this stat is a bit skewered. Everyone else seemed to be reporting actual figures. If you took the "companies that exited leasing in 2001" figure off National Equipment Leasing Brokers (NAELB) numbers, for instance, they might have actually had a small gain. If you added it back into Eastern Association of Equipment Lassoer's (EAEL )numbers, I would bet serious money that they had a significant loss.

Just a thought.

Sorry about the Niners.
Ken Goodman

(Allison Prior of EAEL alluded to problems in her e-mail, but did not explain it. although the actual numbers increased. by 7%.

You are correct though as we don't know the mix, meaning how many less fundors or more brokers. We also don't know the story why the drop in NAELB, especially in view of the other associations... but more the reason to have Mike Meacher as the "Meet the Leasing News Maker" next week. Ken, tune in next Thursday at 1pm, California time.

Leasing News is up-dating the Dues Comparison section, too, and looks forward to continued cooperation from all the leasing associations about their membership mix. Editor). ________________________________________________________________

Sun Micro/GE

Noticed that Sun Micro/ GE has about twice the Lease Reps they had in 2000 and about half of the volume. looking for something to happen there soon... See what you can find out.

(Name with held)

(Thank you for the lead. editor) _____________________________________________________________

Heller Financial

** Confidential **
** High Priority **

The "drop dead" date for Heller in Troy... is Friday.

There are several scenarios.. Because of programs that over lap with GE they could just lay off everyone with severance for some.

Or they may get rid of everyone except the sales people keeping sales people remote. Or they might move the Cedar Rapids office to Troy but it's not likely...

Or because of the IT focus in Troy they may keep them there... ? Stay tuned.......

(Name with held)


Please send to a friend as we are trying to build our readership. No advertising. No banners. "Insider News." We try to appeal to all in the equipment leasing industry, not just one segment. Day in American History is written exclusively for our E-mail edition by Kit Menkin. This does not come from one source, but many, and is researched and compiled for the e-mail edition.


Citi Medical

I heard that Citi Medical is "reorganizing" and that usually means loss of jobs...
Do you know anything about this?

(Name with held)

(I did notice this story in the Wall Street Journal: Citigroup's Move to Change Enron Debt to Secured Sparks Outcry January 16, 2002
By Jathon Sapsford and Mitchell Pacelle, Wall Street Journal

When Enron turned to its bankers for money in late October, the energy company needed a quick, big loan to restore investor confidence in its finances.
Citigroup came up with the cash - but with a catch.

Enron owed Citigroup $250 million in unsecured debt that was coming due in early December, just one portion of the overall debt Enron owes the bank. So Citigroup told Enron it would provide $600 million of a new $1 billion secured loan - as long as $250 million was used to pay back existing Citigroup debt, according to people familiar with the transaction.

Now, a number of bankers in the lending syndicate are crying foul. Citigroup, they say, used its influence as a new secured lender to improve the standing of unsecured loans it had already extended at the expense of other lenders. The bankers say they discovered only later that part of the loan facility was used to prop up a Citigroup debt position. Thus, the bankers are likely to challenge Citigroup's arrangement as part of Enron's bankruptcy filing in a New York bankruptcy court.

Few can blame Citigroup for trying to reduce its exposure to Enron. But some analysts say the maneuver raises questions about whether Citigroup moved unfairly to grab assets. And the deal effectively reduced the pool of collateral available to all of Enron's other creditors in the bankruptcy proceedings. "There's a bit of a conflict there," says Andy Collins, an analyst with U.S. Bancorp Piper Jaffray.

Citigroup declined to comment.

At a minimum, the controversy over the Citigroup financing underscores how contentious Enron's bankruptcy process could become as numerous creditors fight to secure a piece of a shrinking asset pie. In addition, it raises still more questions about the multiple hats worn by large lenders such as Citigroup, and the conflicts that may create with Enron's other creditors.

For Enron, the demand was a disappointment. While Enron trumpeted $1 billion in fresh financing to the investing public, it actually received only $750 million in new money, less than it had wanted, according to several people involved in the financing.

Enron Chief Financial Officer Jeffrey McMahon has been telling other creditors that Enron needed cash so badly that Enron had no choice but to go through with the deal. McMahon was unavailable to comment, but an Enron spokeswoman says, "We got the best deal we could at the time." The arrangement was driven by the fact that the $250 million debt in question, linked to financing for a natural-gas transaction, was soon to come due, according to a banker familiar with Citigroup's strategy.

J.P. Morgan Chase & Co., which contributed the remaining $400 million to the $1 billion credit line, also had hundreds of millions of dollars in existing unsecured exposure to Enron. Unlike Citigroup, it made no demands that its own existing loans be rolled into the new credit facility. An official at J.P. Morgan declined to comment.

The incident sheds some light on the inner workings of Citigroup in the Enron mess. J.P. Morgan has disclosed it is owed some $2.6 billion in Enron-related exposure. But Citigroup has kept quiet on the subject. Analysts have said it was at least $1 billion, but warn the number could be higher. "Citigroup's disclosure has been lagging," says Collins.

In most bankruptcy cases, unsecured creditors examine all loans extended before the filing to see whether the collateral was granted properly. If an unsecured debt was paid off, or turned into a secured debt, within 90 days of a bankruptcy, that lender is sometimes accused of receiving a "preference" over other lenders.

Because such "preferences" clash with a basic aim of bankruptcy law - to stop a race to the courthouse by treating all similarly situated creditors the same - they can be challenged in court. A potential challenge by some creditors against Citigroup, in essence, would be that the bank improved its standing in the line of creditors by demanding new collateral on the $250 million of unsecured debt, thereby taking away from other creditors assets that might be available pro rata to other unsecured creditors.
Such challenges are often mounted late in the bankruptcy process, when creditors are hashing out how to allocate assets that have been assigned to creditors.

If the Citigroup financing is successfully challenged, the $250 million claim would once again become unsecured, freeing up the collateral for the potential pool of assets to be divvied up by unsecured creditors.

Noticed that Sun Micro/ GE has about twice the Lease Reps they had in 2000 and about half of the volume.. look king for something to happen there soon..

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Equipment Finance Journal Awards----Correction

Your current Leasing News refers to a "best leasing awards" started but never completed by the EFJ. I wanted to let you know that it was completed and it's objective was to recognize "pioneers of the leasing industry" for the period ending 1980. For your information, the individuals honored for their contributions to the leasing industry and the categories they were chosen in were as follows:
1)Big Ticket-Peter Nevitt and Pod Boothe
2)Middle Market-Bob Merritt and Norm Chapman
3)Small Ticket/Vendor/Captive-Ned Mundell and Bill Montgomery
4)Service Providers-Jim Warren and Jim Selbert and Jim Babcock and George Brown.

They were all recognized in the July/August issue of the EFJ and summaries of their careers and accomplishments were included. If any of your readers would like a complimentary copy of this issue, please have them contact me.

Keep up the good work and belated wishes for a Happy, Healthy and Successful New Year.
Ron Caruso

( Wow! I don't know how I missed that. I read the Equipment Leasing Journal that is mailed to me, subscribe to the electronic newsletter, and often visit your web site, too. I don't know how I missed the results of the contest. If you send me the full story, I will re-print it for our readers. If readers would like a direct copy, please take Ron up at his request, otherwise it is $10 a back issue copy. editor )


De Lage Landen Financial Services names Pete Connor Director of Sales - Western Region for its Office Equipment SBU

De Lage Landen Financial Services, a leading international provider of high-quality manufacturer and vendor finance programs, has named Pete Connor as Director of Sales --Western Region for its Office Equipment Strategic Business Unit.

In his new position, Connor, 41, will be responsible for managing the eight-member Western Sales Team for the SBU, the company's core business unit and the established industry leader in private label small ticket leasing. He will report directly to Vice President of Sales Pat Neary.

Prior to joining De Lage Landen, Connor was Vice President of Sales for Leasing Group, Inc. of Austin, TX, a leasing services provider. During his four-year tenure, he managed and developed various business units which performed transaction processing for the company's national accounts. He also managed the company's funding source relationships.

Connor is a graduate of Stephen F. Austin State University at Nacogdoches, TX with a B.S. degree in Finance.

De Lage Landen Financial Services is part of De Lage Landen International B.V., an international provider of high-quality asset-based financing products. The company, headquartered in Eindhoven (The Netherlands), is part of the Dutch Rabobank Group and has offices and joint ventures in 18 major countries throughout Europe and the Americas. Specializing in asset financing and vendor finance programs internationally and concentrating domestically on a broad range of leasing and trade finance products, De Lage Landen in 2000 grew its net profit to $50 million (_54 million) and its balance sheet to $8.4 billion (9.1 billion)in assets.




Marc Donahue

De Lage Landen Financial Services

Phone Number: 610/386-5030

Fax Number: 610/386-5038



 ( Courtesy of )


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               Yes, there will be an edition Monday, January 21,2000


                   Dr. Martin Luther King, Jr. Official Holiday


Streamlined Sales Tax


The leasing definition has been placed on the agenda of the Streamlined

Sales Tax Project meeting in New Orleans.  The Leasing Subgroup will touch

upon it during the morning session on Thursday, January 24.  Assuming no

opposition is raised, it will be discussed and voted upon during the full

Project meeting scheduled Thursday afternoon.  Wyoming Department of Revenue


Director Johnnie Burton will likely Chair the Leasing Subgroup discussions

in the absence of Scott Peterson, Business Tax Director, South Dakota

Department of Revenue.  Scott must stay in South Dakota for the legislative



Dennis Brown









-- Request to Readers---Magazine/Newsletter Back Issues


Past Magazine/Newsline Editions---for research and "obituary purposes,"

Leasing News is trying to build up our library. If you have any old issues

of Equipment Lease/Finance Report/ WAEL or UAEL Newsline/ or any industry

magazine, we would be glad to send you a UPS pre-paid envelope or send to us


UPS collect at 346 Mathew Street, Santa Clara, Ca. 95050. One of our

projects in the future will be to catalogue them.



U.S. Housing Starts - December  2001


Due primarily to a 26% decrease in multi family activity, housing starts

fell 3.4% in December to a rate of 1.57 million (SAAR).  This is the exact

opposite to last month's activity when the volatile multi - family sector

increased 23%.  The good news is that single-family starts were up a

respectable 3.6% to 1.293 million (SAAR).    Permits, an indicator of future


activity, were up 3.6% (1.653 million SAAR.  Single-family permits were up

3.1%.  Regional starts data showed weakness everywhere except the West where


starts were up 8.3%.


Analysis and outlook:  Total starts for 2001 were 1.603 million, 2% above

the 2000 figure of 1.568 million.


 Single - family starts in 2001 were 1.274 million, 3.5% higher than 2000's

1.23 million.  


  Housing fundamentals remain strong: mortgage rates are still attractive

despite inching up in December (the December fixed rate for conventional 1st


mortgages averaged 7.07%, compared with 6.67% in November); consumer

confidence is returning from the September 11 lows; inflation at the retail

(CPI) and wholesale level (PPI) is a non event; business investment plans,

according to the latest survey from National Assoc. Business Economists, are


expected to improve over the next 12 months; and the FED may give us another


rate reduction at the end of the month.


 Some problems remain: industrial production continues to languish, with

capacity utilization at 74.4%, the lowest level since 1983; unemployment is

approaching 6%, however, the initial claims 4 week moving average (a better

indicator of the current employment situation), has been improving since

October; and corporate profits aren't expected to improve much before the

second half of "02" due to continuing overcapacity problems in key

industries like autos, semiconductors, steel, and many wood products.    


The consensus for the timing of macroeconomic recovery keeps changing -

essentially postponement to later in the year.  The current thinking is for

a slow and gradual recovery starting in the 2nd half.


 The reasons for the delays are continuing weakness in the manufacturing

sector - this won't change until capacity utilization (and profit margins)

improves. When it does, stronger business investment will support better GDP


growth and a better employment picture.


 Housing is expected to pull back modestly this year, but the annual rate

(SAAR) should remain healthy (latest NAHB forecast calls for 1.575 million

starts in 2002 with 2.24 million SF starts).  If there is a weak point to

the housing sector, most analysts feel that weakness in the "luxury home"

category will continue.  


  And, because housing stayed strong during the current recession, there is

little "pent up " demand in the system, and that means residential

construction can't be expected to lead us out of the current economic

downturn as it has in past.  









State-by-state cigarette tax rates



By Associated Press,


 A comparison of per-pack state taxes on cigarettes.


On Wednesday, state legislators in Albany approved a

39- cent-a-pack increase in New York State.


 Beginning April 1, New York's cigarette tax will become $1.50 per pack.


1. Washington, $1.425

2. New York, $1.11 (increases to $1.50 on April 1)

3. Arkansas, $1

3. Maine, $1

3. Rhode Island, $1

3. Hawaii, $1

7. California, 87 cents

8. New Jersey, 80 cents

9. Wisconsin, 77 cents

10. Massachusetts, 76 cents

11. Michigan, 75 cents

12. Oregon, 68 cents

13. Maryland, 66 cents

14. District of Columbia, 65 cents

15. Arizona, 58 cents

15. Illinois, 58 cents

17. New Hampshire, 52 cents

18. Utah, 51.5 cents

19. Connecticut, 50 cents

20. Minnesota, 48 cents

21. North Dakota, 44 cents

21. Vermont, 44 cents

23. Texas, 41 cents

24. Iowa, 36 cents

25. Nevada, 35 cents

26. Arkansas, 34 cents

26. Nebraska, 34 cents

28. Florida, 33.9 cents

29. South Dakota, 33 cents

30. Pennsylvania, 31 cents

31. Idaho, 28 cents

32. Delaware, 24 cents

32. Kansas, 24 cents

32. Louisiana, 24 cents

32. Ohio, 24 cents

36. Oklahoma, 23 cents

37. New Mexico, 21 cents

38. Colorado, 20 cents

39. Mississippi, 18 cents

39. Montana, 18 cents

41. Missouri, 17 cents

41. West Virginia, 17 cents

43. Alabama, 16.5 cents

44. Indiana, 15.5 cents

45. Tennessee, 13 cents

46. Georgia, 12 cents

46. Wyoming, 12 cents

48. South Carolina, 7 cents

49. North Carolina, 5 cents

50. Kentucky, 3 cents

51. Virginia, 2.5 cents

The federal per-pack tax is 39 cents.


SOURCE: American Cancer Society


New York's unemployment rate continues to climb

By Joel Stashenko, Associated Press


ALBANY, N.Y. (AP) New York state's unemployment rate rose to 5.8 percent in

December, its highest level in nearly four years, and analysts Thursday

blamed the Sept. 11 terrorist attack and the national recession.


Unemployment was 5.5 percent in November and 4.5 percent in December 2000.

December's jobless rate matched that of the nation as a whole, the state

Labor Department reported.


Joblessness in New York City was 7.4 percent, up from 6.9 percent in

November and 5.6 percent in December 2000. Between December 2000 and

December 2001, the state lost 111,100 private-sector jobs 95,800 of them in

New York City.


Along with ''wide spread'' manufacturing losses, the finance, insurance and

real estate sector of the economy also lost 3,200 jobs in December and

transportation and public utilities which includes the airline industry lost


1,800 jobs last month.

Gov. George Pataki's chief economist, Stephen Kagann, found a bright spot,

of sorts, in the latest employment report. He said the pace of the monthly

loss of jobs is continuing to slow, from 63,000 in October to 23,300 in

November to 9,500 in December.


New York City's job loss from December 2000 to December 2001 was 3 percent,

or twice the national rate.


''Yet, even with large losses in the city, the state is weathering the storm


better than it did during the recession of 1990-91,'' Kagann said. Unlike

the recession of a decade ago, Kagann said few companies are leaving New

York and taking their jobs with them.


The last time unemployment was as high as 5.8 percent was in March 1998.

Among individual counties, Cortland had the highest unemployment rate in

December at 9.6 percent. Putnam

The jobless figures are based on monthly surveys of 20,000 businesses. The

jobs are both full- and part-time. The jobs data does not include

agricultural workers, the self-employed and domestic workers in private



The statewide jobless figures are seasonally adjusted, which means they are

altered to take into account normal fluctuations in employment schools being


in or out of session, for instance, or summer tourism-related jobs over the

course of a year.


Here is a breakdown, not seasonally adjusted, for major metropolitan areas

in the state:


New York City, 245,900 jobless or 7.0 percent, compared with 6.8 percent in

November and 5.2 percent in December of last year.

Albany area, 15,700 or 3.5 percent, compared with 3.2 percent and 3.1


Binghamton area, 6,800 or 5.4 percent, compared with 5.0 and 3.3.

Buffalo area, 30,700 or 5.5 percent, compared with 5.2 and 4.9.

Elmira area, 2,800 or 6.6 percent, compared with 6.0 and 4.1.

Poughkeepsie area, 4,300 or 3.6 percent, compared with 3.5 and 2.5.

Rochester area, 30,100 or 5.3 percent, compared with 5.0 and 3.7.

Syracuse area, 18,800 or 5.2 percent, compared with 4.9 and 4.3.

Utica-Rome area, 6,900 or 4.9 percent, compared with 4.5 and 4.2.

Nassau County, 25,400 or 3.6 percent, compared with 3.6 and 2.3.

Suffolk County, 27,900 or 3.8 percent, compared with 3.7 and 2.8.

Westchester County, 16,800 or 3.8 percent, compared with 3.7 and 2.6.

Rockland County, 4,700 or 3.3 percent, compared with 3.3 and 2.4.

Putnam County, 1,500 or 2.7 percent, compared with 2.8 and 1.9.







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