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September 26, 2001 Kit Menkin’s Leasing News www.leasingnews.org ------------------------------------------------------------------------------------------------------ Liberty.org----Recommended by President George Bush When you have Leasing News delivered by e-mail, you also get “This day in American History,” written especially for Leasing News. ---------------------------------------------------------------------------------------------------- Headlines--- American Express Business Finance---Exclusive 750,000,000 problem Leasing News Classified Up and Running E-Mail Problems RBC Centura Targets Tech Companies With Specialized Lending Unit National Association of Equipment Leasing Help Desk Whatever Happened to....tomorrow. ### denotes press release ___________________________________________________________ American Express Business Finance Problems: $750,000,000 plus $20,000,000 We were working on the $12 to $20 million problem with the RW Professional portfolio, part of Sierra Cities, that somehow lost the personal guarantee in the transfer to Sierra Cities, when we received this e-mail: "Tip--you may want to take a look at the MidAm portfolio since there were lots of rumors that Depping dropped the reserve requirements and the 100% bank guarantee for his drinking and fishing buddies at MidAm (now Sky Financial)". Readers may remember we alluded to it, and still had our eye on the RW Professional story, with several sources willing to go public, and were collecting two more eye-witnesses, when the events on September 11 turned the world around. We also were not happy that we had headlined the story we were working on as American Express Business Financial bomb and called it Ka-Boom in many stories. Along with the rest of the world, we had no idea terrorists were capable of doing what they did, and we felt secure in the United States it would not happen here. In retrospect, we felt badly we used these words as headlines. We just got this in from a very reliable source within American Express: “Word just came in that the Mid-Am Portfolio of over $750,000,000 is completely under reserved. Doctors were given step up payment plans they are unable to meet. Keep my name confidential, and I'll find out more info.” Since a major newspaper may pick this up, I am going to go with what we were working on then, pieced also together from some of the sources on the RW Professional Portfolio “dilemma”. We were told they were “investigating” the RW Portfolio, but did not tell us about looking into this: MidAm was the largest Private Label Recourse Broker that First Sierra ever had. The first contract with First Sierra called for MidAm to fund a minimum of $500,000,000 per year in return for extremely low rates, Leasing News is told. From 1997 until MidAm closed out the relationship with First Sierra in mid-2000 and changed its name to Sky Financial Solutions, Inc., MidAm was funding somewhere around 50% of First Sierra's volume each month from early 1998 until they stopped outsourcing their deals in mid-2000, Leasing News is told. A highly reliable source told us until a second agreement was signed to broker "general" business leases, the MidAm program was strictly for the medical sector with emphasis on the dental area. A major portion of their business was financing practice acquisitions for dentists. The prices on these practice acquisitions could be anywhere from $250,000 to over a million. At one time, the MidAm portfolio was reported as being well over one billion dollars. Some reports had it at closer to $1.5 billion. In competing with Matsco, American Express and others, the rates were very, very low. Thomas Depping himself reportedly always complained about the low yield, but First Sierra had to have the volume for "stock market purposes" so there was no choice but to keep the program going. According to a manager in the First Sierra credit department, MidAm broke off the relationship in mid-2000 and gave First Sierra a $20,000,000 Letter of Credit from its parent bank to cover future losses in the portfolio. The $20,000,000 was set as the limit for their exposure. At the time, the MidAm portfolio was performing great, Leasing News is told, but one little thing was overlooked--deferred or reduced payments. Now that the deferred or reduced payments are running out, a doctor who bought an $800,000 practice two years ago may be jumping from a $4,000 monthly payment to over $20,000. Guess what happens to the portfolio when this payment jump takes place? If $20,000,000 is the only coverage for a portfolio in the billion dollar range, it will not be a drop in a very big bucket". American Express Business Finance is now looking at MidAm/Sky Financial, it is reported to us. ------------------------------------------------------------------------------------ Question asked on September 7,2001 Broker calls up funding source and says, "How did you like the way I screwed you over for $10,000,000. Was it as good for you as it was for me? Well, I thought it was fun and now you have a decision to make---do you put me in jail and get nothing or will you settle for $3,000,000 and give me a clean bill of health, so I can go back to business as usual?" To all the funding sources, what would your answer be? We received one response, and since we did not receive any others, we directly asked 15 funders for a response. None of them even wanted to say “no comment.” They all said please don’t report that you asked us this question. __________________________________________________________ Classified Up and Running Go to www.leasingnews.org and click on Classified Thank you, Steve Chriest for your help in design and implementation. We should also give credit to our Carl Moberg for his technocracy and assistance. This looks easy, but it actually works off a separate server that links to our web hosting server. It was only up about 15 minutes, and I was doing some testing, thinking about putting a test for readers to see, but low and behold, up popped our posting: Legal Arlington Heights IL I am looking for a position as an attorney within the leasing industry which will utilize my 10 years' legal and operational skills and experience. robertecondon@yahoo.com What will make our unique is that it is designed for contact by telephone, or if local, we recommend a visit. Resume don’t get you jobs. They get you eliminated from interview. The idea is if you are interested in this person, you will contact him by e-mail. He then can e-mail you back or telephone you or visit you. The purpose is to give exposure and an introduction. Leasing News will also post these jobs wanted in our daily news. Not every day, but from time to time. We are working on a help wanted section. The Leasing News advisory board wants me to charge for this, and we will again discuss this in San Antonio. I want to remain “free.” I think once you get money involved, it dirties things up, and all of a sudden you are beholding to an advertiser or sponsor. Our readers have helped several find work. We appreciate it. We have also tried, too, as evidenced by this “name with held” e-mail: Hi Kit. Just wanted to thank you once again for your support in allowing my name to be mentioned in your newsletter. Many people I thought were my friends turned their backs when they heard I was looking for a new job. You on the other hand, who hardly knew me from Adam, did everything you could to get my name out there. I
have taken what
may be the most
rewarding position
I've ever held,
and that is nanny
to my four young
grandchildren.
I had been
trying to ignore
the steps that kept
pointing in this
direction, but sometimes
decisions are made
for us and I believe
this to be true
in this instance. Leasing may be a part of my life at some future time, but for now, my days will be spent with four wonderful children who make me proud to be called "grandma". Once again, this message is for your eyes only as I wanted to let you know that I'm truly appreciative of your kind efforts in my behalf. For the time being, please continue your E-Mails to me. ------------------------- Perhaps she is better off as her new job will be quite rewarding not only for her, but her daughter and grandchildren. Please bear with us as we learn this new procedure. It is free. We hope it will help the industry. And please note on our page we have listings of other on line job postings and services, plus recruiters who specialize in the leasing industry.. editor __________________________________________________________________ October 28-30, Baca Rutan, Florida 40th Annual Equipment Leasing Association Conference Many of those attending the United Association of Equipment Leasing Conference in San Antonio, Texas, have told me they are leaving late Saturday to attend this important conference. They are going to both because they are located nearby, and the ELA Florida Conference will be perhaps the largest leasing conference in attendance this year. To learn more, go to: http://www.elaonline.com/events/2001/AnnConv/speakers.cfm _______________________________________________________________ E-Mail Problems I haven't received your newsletter this week. We've had a lot of activity from the latest virus attacks and as a result I'm not sure if your newsletter is being virus blocked from our (my) site or you haven't sent one lately. CIT would have no reason to intentionally block your newsletter so it must be a virus block or is it a lack of industry news? Bob Southwell Bob.Southwell@cit.com CIT Systems Leasing (Soon to be Tyco Systems Leasing) (We have had all PacBell ISP users and Balboa PSI net users come back. We have been working with Balboa's MIS to find out the problem. It appears to be the manner in which their connection to their ISP is looped. It could also be a firewall problem. We are going to change our firewall to a “static” and more secure, although we don’t think it is a problem on our end. We find out what is happening by “pinging” the site. Mdean at Balboa has put in a lot of time trying to trace the route. Also, I think sometimes the internet is overloaded and that makes a difference. We have gotten a few back noting that because we mentioned a story about a virus, their program thinks it is a virus and "blocks" the e-mail. To my knowledge, we have not gotten any cit mail back, and that is basically the only way I know the message was not received. You can go to our archive at www.leasingnews.org for past editions. We also post it daily. And if you like the text edition better, let me know what you dates you have not received, and I will forward to you. editor ) __________________________________________________________ ### ################## ##################### ################ RBC Centura Targets Tech Companies With Specialized Lending Unit; Knowledge Based Industries Group Opens Charter Office in Raleigh
RBC Centura Banks Inc. introduced its newly formed Knowledge Based Industries (KBI) group with the opening of the unit's first U.S. office in Raleigh. The KBI unit is a specialized lending group of RBC Centura that provides early-stage loans and commercial banking services to high tech companies. "For years we've made a business of meeting the needs of our customers," said Kel Landis, RBC Centura's CEO. "The formation of our KBI unit is of the same mold, as we identified the unique financial needs of the region's numerous technology companies, recognized this area as an opportunity for tremendous growth, and went to work developing a customer solution that caters to the highly specified lending needs of these companies." The KBI group will provide its high tech customers with a full range of financial and advisory services, offering life cycle financing to information technology and life sciences companies specifically. It will combine its services with those of RBC Centura Capital, the private equity arm of RBC Centura, and its affiliated local venture capital firms, to develop end-to-end financial solutions for the companies its serves. The opening of the KBI office, located at 3201 Beachleaf Ct., comes on the heels of the appointment of the group's management team. Leading the KBI unit is Brent Keating, the former head of Royal Bank of Canada's technology lending practice in Toronto, and with him, seasoned technology lending expert Chris Julich. Keating, a technology lending professional with 15 years of experience, is responsible for the management and development of RBC Centura's KBI operation in the southeast U.S. Added to his expertise is that of Julich, who joins RBC Centura from Imperial Bank's emerging growth division, where he served as vice president and manager of its North Carolina office. "We are both thrilled and challenged by this opportunity to create and build a business," Keating said. "The launch and development of KBI in North Carolina, and eventually throughout the southeast, positions RBC Centura well to meet the financial needs of a target customer base that faces unique business challenges." RBC Centura's KBI operation in Raleigh will serve as a platform for expansion into other technology centers in the U.S., with plans for future expansion slated for Atlanta and Washington D.C. About RBC Centura Bank, Inc. RBC Centura Banks Inc., a $12 billion-asset financial services company based in North Carolina, provides a complete line of banking, investment, insurance, leasing and asset management services to individuals and businesses in North Carolina, South Carolina and Virginia. RBC Centura's broad range of financial solutions is provided through more than 240 full-service financial offices and Centura Highway, the bank's multifaceted customer access system that includes telephone banking, an extensive ATM network, PC banking, online bill payment and the bank's suite of Internet products and services. Centura Bank is a unit of Royal Bank of Canada. RBC Centura is a trade name used by Centura Bank. Additional information may be found at www.centura.com.
Sites of Reference: ( courtesy ELAonline.com ) #### ##################################### ################### NAELB "Help Desk" The National Association of Equipment Leasing Brokers (NAELB )has established a "Help Desk" for its members.. Michael Meacher, President, announces that Dee DiBenedictis, who currently sits on the NAELB will man the Help Desk. Dee DiBenedictis has over 15 years experience in the industry working for funding sources such as Denrich Leasing and Unicyn Funding Group, in capacities ranging from credit and documentation through collections and marketing " Dee should be able to answer just about any question relating to the industry, he said. " With the fifth anniversary of her own company SunStar Equipment Leasing coming up in a few months, she is well aware of the obstacles and opportunities we all face as brokers in the leasing industry today." Inquiries regarding general association information, such as membership info and renewals, conference and meeting schedules, etc. should be directed to the main NAELB office at 800-996-2352. The Help Desk should be called only for questions and issues that need to be addressed to a peer in the industry. A special phone number for the Help Desk has been established. The phone will be answered on Tuesdays and Thursdays from noon to 4:00 pm. Voice mail messages can be left at anytime.
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