Pictures from the Past –1988

CHICAGO----Falling delinquencies within Fitch's equipment lease ABS delinquency index reflects stabilizing credit quality within the leasing industry over the past 21 months, despite an up-tick in volatility and the growth of the 91+ bucket, according to a new Fitch report.

After dropping a substantial 57 basis points (bps) to 5.58% as of the second-quarter ended June 30, 2002, total equipment lease ABS delinquencies greater than 30 days past due for the quarter ended September 30, 2002 declined another 13 bps to 5.45%.

Although delinquencies are declining, the index continues to reveal significant delinquency migration from the 31-60 day bucket to the older 61-90 and 91+ day buckets. Holding a 31.66% share of total delinquencies, the 91+ day past due bucket reached its largest-ever proportion of total delinquencies in the third quarter. Consequently, Fitch expects to see higher gross defaults in the near term if the 91+ day bucket continues to grow as a percent of total delinquencies.

In addition to highlighting the delinquency index, Fitch's 'ABS Equipment Expo' newsletter features an 'Investor Roundtable' discussion focused on how recovery values factor into the ratings process of equipment lease securitizations as well as a 'Commercial Finance and Leasing Industry Outlook.'

The ABS Equipment Expo' is a publication that tracks equipment lease ABS performance, industry trends and developments within the securitization market. Both current and historical editions of the newsletter are available on Fitch's website at 'www.fitchratings.com' or by contacting Products & Services at 212-908-0800 ( or see below.editor )

CONTACT:

Fitch Ratings

Sara Grohl, 312/368-5467

John Bella, Jr., 312/368-2058, Chicago.

Media Relations:

Matt Burkhard, 212/908-0540, New York.

Go here: http://www.fitchratings.com/corporate/sectors/newsletters.cfm?sector_flag=1&marketsector=2&detail=

Open: 25 Nov 2002

The ABS Equipment Expo

Use Adobe Acrobat to open the file, as the file is in Adobe ( you may need to first

download in zip, and then use Adobe, depending on your browser.editor )

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U.S. Bankruptcies Break Record

In Switch, Consumer Filings Rose in Late Summer

By Caroline E. Mayer

Washington Post Staff Writer

Strapped by debt, Americans filed for bankruptcy protection in record numbers in the three months that ended Sept. 30.

Bankruptcies totaled 401,306 for the quarter, up 12 percent from the same period of last year, according to data released yesterday from the Administrative Office of the U.S. Courts.

The number of recent bankruptcy filings was up only 0.2 percent from the three months that ended June 30, when bankruptcies totaled 400,686. But even that slight increase worried bankruptcy experts, who noted that historically the number of filings usually declines in the late summer.

"I am a little surprised," said Samuel J. Gerdano, executive director of the American Bankruptcy Institute, a nonpartisan group that researches insolvency issues. "Last year we had a 10 percent drop between the end of June and the end of September. This reflects that the debt of the '90s is hanging over us. Consumer debt is very high, and families are under a lot of stress.

“They are living paycheck to paycheck and haven't saved, so when something bad happens that they haven't anticipated" there is no way out but bankruptcy protection. As long as consumer spending remains robust and personal savings stay low, more bankruptcies can be expected, said Gerdano, whose organization compiled the latest figures.

As usual, consumer filings accounted for the largest number of bankruptcies: 391,873 for the quarter, up 12 percent from 349,981 in the year-earlier quarter. Business filings, on the other hand, were down 1 percent from last year, to 9,433 from 9,537. Of all bankruptcies, more than 70 percent were for Chapter 7 -- which allows consumers to cancel all their debts.

The latest numbers will give more fuel to credit card firms and financial institutions that have been pressing to change the nation's bankruptcy laws to make it more difficult for debtors to file for bankruptcy and wipe out their debts. Such legislation, which has been considered by Congress in one form or another for the past decade, came close to passing this year until a last-minute squabble over a provision affecting abortion protesters.

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THE GRASSHOPPER AND THE ANT:

(With apologies to Aesop)

by Phil Cerasoli

Once there was this grasshopper

Who loved to play all day,

Or lay beneath the warming sun

And dream the hours away.

While his friend...a little ant,

Would work the whole day through

To round up all the food he could;

His stockpile grew and grew.

And he would chide the grasshopper

With words of sound advice:

"The summer's almost over

And soon the snow and ice...

Will cover all the land around

And there will be no food.

You'll spend each and every day

In a cold and hungry mood".

The grasshopper just smiled at him

And kept on with his play;

Then he lay back and dreamed some more

And this went on each day.

But soon the summer faded

And snow began to fall.

Then hunger hit the grasshopper

But there was no food at all.

But he refused to panic

He didn't rave or rant.

He just hopped down the icy road

And ate his friend, the ant.

MORAL:

It's nice to be methodical

'Til all the work is gone.

But, in the end, the pragmatist

Is just the dreamer's pawn.

by Kit Menkin

Wait until the subprime mortgage market gets hit, backed by bank loans for cashflow. Many people borrowed for "living capital" and to pay off large debts ( which they did not),using the equity in their house from high market real estate conditions. If it gets soft, and they can't make the payments, the collateral may not be there for the lender to make the loan "whole." April, 2003, will be the

month to learn the direction of not only consumer confidence, but ability

to meet debt. Banks and financial groups who have bought their

way into the marketplace with a fast growth pattern will be the first to

go. Look for the bankruptcy of Commercial Money Center to give you

a hint of who the fast money players are---one bank with a “N” in its name may

lose $80 million, it is reported.

It is deceptive to compare the Home resales to October,2001. Sales of existing houses jumped 6.1 percent, to a 5.77 million-unit annual pace, the third- highest on record, from 5.44 million in September, the National Association of Realtors said. The median home price was $159,600, up 9.8 percent from October 2001, for the biggest year-over-year gain since July 1987.

Remember, statistics can be very misleading. A man with one foot in a bucket

of ice and the other in a bucket of hot coals is not comfortable on the average.

October,2001, followed the shock of the terrorist bombing in New York on September 11^th, and the country went into shock for several months, particularly

October. This November also finds Thanksgiving at the end of the month, pushing sales into the first week of December, which has 4 ½ weekends for

Christmas sales. December retailers will pull out all the stops, then the rest will follow in January with the pace to start then with February and March to slacken, making April (the second quarter) the deciding month. This then makes the three-quarter the key to economist prediction of “recovery.” Many businesses and

families don’t have the equity to hang on that long. Editor )

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---States to Look at Equipment Leasing More than ever---

States Face $40 Billion 2003 Budget Deficit

By Christina Ling

WASHINGTON (Reuters) - Sunk in the worst financial doldrums since World War II, states face a possible collective budget shortfall of $40 billion by the end of the fiscal year, the National Governors Association said on Monday.

Nor is the picture any brighter as new governors elected just weeks ago start turning to 2004 spending plans, since underlying problems are likely to cripple state budgets even if the sour economy turns around.

"My sense is probably we have a shortfall at least of $40 billion now," NGA director Ray Scheppach told a news briefing, saying states were likely to cut support for higher education and health care and to raise taxes on corporation and individual incomes to make ends meet.

States are bound by law to balance their budgets and must therefore cut spending or raise revenues to avoid actually ending the year with a deficit.

(If life gives you only a lemon, make lemonade and sell an annual contract

with payments)

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Peter Nevitt -- equipment lessor

by Harriet Chiang, San Francisco Chronicle Staff Writer

San Francisco -- Peter Nevitt, a San Francisco financier who gained international prominence as one of the pioneers of tax-driven leases of aircraft, trains and other capital equipment, died Monday of cancer.

Mr. Nevitt, who was 75, died at his home in Kentfield.

For 10 years, he was the CEO of Mitsui Nevitt Capital Corp., one of the major leasing companies in the United States, until he retired in 1998. Mitsui is a subsidiary of Mitsui Leasing and Development in Tokyo, one of the major leasing companies in Japan.

From 1977 to 1988, he was president and eventually chairman of BankAmeriLease, which was comprised of Bank of America's leasing subsidiaries. Under his leadership, the company became one of the most successful equipment leasing companies and brokers in the world.

Prior to joining Bank of America, he founded Chicago Leasing Corp., which quickly grew to become one of the largest leasing companies in the United States and the United Kingdom.

He was regarded as the inventor of leveraged and synthetic leases, helping countless companies optimize their balance sheets and minimize the tax consequences.