Capital Markets Alternatives for Leasing Companies Jim Murray Managing Director, Financial Institutions Houlihan Lokey

2 Typical Capital Structures _________ (as a % of total assets) Short Term Debt18%11%23%28% (1) Long Term Debt Other Liabilities Common Equity (1) Consists of deposits at CIT Bank

3 Valuation of Leasing Companies Price / Book Value Price / LTM Earnings Mean: 1.48x Mean: 13.0x

4 Typical Terms in Today’s Market Senior Secured Lines / CP Conduits Advance Rate:80 – 85% Interest Rate:L – 450 Subordinated Secured Lines Advance Rate:6-10% above advance on senior line Interest Rate:L Unsecured Term Debt RatedUnrated Maturity: 5 year Coupon:L (BB) L (B) 1-3 years Mid to High Teens

5 Public Equity Public equity markets have reopened for small cap/micro cap finance companies, although no leasing companies have yet gone public in 2009/2010 SeaCube Container filed a $165 million IPO on March 29, 2010 Typical IPO characteristics, historically: Market capitalization: $250 million or more Publicly traded float: $75 million or more

6 Capital Markets - Near Term Outlook Credit markets should continue to evolve favorably Banks beginning to seek new clients for secured lines Unsecured credit markets seeking new issuers Renewal of securitization market possible, but timing uncertain Equity is once again a key consideration Back to the traditional “chicken and egg” situation But that’s better than “no chickens and no eggs”

7 Private Equity Private equity can be a stepping stone to: An initial public offering A sale of control A number of private equity firms have experience in making minority investments in leasing companies, such as: Falfurrias Capital Partners (Commercial Credit Group) CIVC Partners (Partners Equity Capital Co.) Warburg Pincus (Charter Financial) Minority private equity investors: Typically seek 30% or less ownership in a portfolio company May make investments ranging from $15 million to in excess of $100 million