1. Lease Syndication and Securitization Paul Bent Principal The Alta Group, LLC Latin American Leasing Leadership Summit May 2, 2007 Rio de Janeiro

2. 2Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Meaning of “Syndication” Commonly used term But not always clearly defined Multiple definitions reflect specific usage  Generic term  Specific transaction structure  Particular professional discipline or department Actual meaning dictated by context

3. 3Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Definitions of “Syndication” By market segment  Large ticket leasing  Sharing equity participation among investors  Selling off portions of equity to additional investors  Middle market or vendor leasing  Assigning lessor’s interest to a third party  Selling payment stream to a third party  Lease portfolios  Sharing lessor’s participation in multiple leases  Selling or assigning lessor’s interest in multiple leases  Securitizing streams of rental payments or receivables

4. 4Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Definitions of “Syndication” By transaction type  Leveraged leases  Sharing equity or debt among multiple participants  Selling off debt participations to additional lenders  Operating or true leases  Selling or assigning lessor’s interest in leases  Selling participations in lessor’s interest  Asset based lending  Selling lease receivables  Recourse, non-recourse, or partial recourse  Securitization  Selling lease rental streams  Utilizing non-recourse funding  Raising equity through public markets

5. 5Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Definitions of “Syndication” By professional discipline  Funding and credit  Underwriting or providing credit support for equity or debt participations  Selling participations in equity or debt interests  Legal  Marketing or offering equity or debt participations in leases  Offering equity or debt participations in securitizations  Arranging a syndicate of equtiy or debt participants for a specific transaction

6. 6Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Common Properties in Syndication Involving parties other than the original lessor and lessee Sharing interests among multiple participants Coordinating and balancing the interests of multiple parties  In a single transaction  In a series of transactions

7. 7Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Benefits of Syndication Distribute risk  Among multiple parties  Over the term of a lease Optimize ratios  Equity vs. assets  Exposure vs. potential upside  Rate of return Reduce overall cost  Distribute transaction costs  Increase leverage Generate revenue  Fee income  Spread margins

8. 8Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Drawbacks of Syndication Time and expense  Legal review  Documentation Normalization of Risk/Exposure  Differences in investment objectives  Differences in risk tolerance  Differences in timing and income tax treatment

9. 9Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Syndication Structures Simple transaction brokering (assignment) LesseeLessor / Broker Funding Source Funding Rentals Assigned Rentals Funding (discounted)

10. 10Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Syndication Structures Leveraged lease equity syndication Lessee Owner Trust (Lessor) Equity Participant (Beneficiary) Equity Participant (Beneficiary) Equity Participant (Beneficiary) Debt Participant 70% Funding 30% Funding 10% Funding Lease Rentals Debt Service (Non-Recourse) Equity Repayment Assigned Debt Service

11. 11Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Syndication Structures Leveraged lease equity and debt syndication Lessee Equity Trust (Lessor) Indenture Trust (Lender) 70% Funding 30% Funding` 10% Funding Lease Rentals Debt Service (Non- Recourse) Equity Repayment Debt Participant (Beneficiary) Debt Participant (Beneficiary) Debt Service Debt Service Equity Participant (Beneficiary) Equity Participant (Beneficiary) Equity Participant (Beneficiary) Assigned Debt Service

12. 12Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Syndication Structures Portfolio syndication (assignment) Lessees Original Lessor New Lessor Original Rentals Assigned Rentals Discounted NPV of Rentals Assignment of Leases Leases Full or Partial Recourse

13. 13Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Syndication Structures Portfolio syndication (sale) Lessees Original Lessor Original Rentals Assigned Rentals Discounted NPV of Rentals Sale of Leases Original Leases Assigned Leases No Recourse New Lessor New Lessors New Lessors

14. 14Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Syndication Structures Securitization of rental streams Lessees Original Lessor Leases Original Lease Rentals Funding Source Syndicated or Public Funding Sources Special Purpose Company Assigned Lease Rentals Discounted Purchase Price (less Holdbacks) Funding Rated securities Full or Partial Recourse

15. 15Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Case Studies / Examples Leveraged lease syndication  Big ticket assets (US$200 million)  Owner trust as Lessor  Two beneficiaries (equity participants)  Different income tax treatment  Different pricing and yield requirements  Indenture trust as Lender  Seven beneficiaries (debt participants)  Different payment requirements  Different credit requirements  Single interest rate, loan documentation, legal counsel  Multiple lease schedules (equipment types)  Multiple closings (timing)

16. 16Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Case Studies / Examples Portfolio syndication (sale with partial recourse)  Middle to large ticket assets (US$150 million aggregate)  Various asset types  Telecommunications  Commercial aircraft  Transportation equipment  Various credits  Rated  Non-rated  Various lease terms  Near expiration  Long term  Multiple purchasers  Various residual values

17. 17Paul Bent - May 2, 2007 Latin American Leasing Leadership Summit Case Studies / Examples Lease securitization  Small to middle ticket assets ($120 million aggregate)  Reasonably uniform credits  Scored and structured under similar criteria  Well documented  Good geographical and equipment diversity  Limited residual obligations  Primarily capitalized leases  Primarily “$1 outs”  Uniform rating of SPC securities  Rated by national rating agency  Supported by partial recourse to seller

18. Questions & Discussion Thank you. Paul Bent The Alta Group pbent@thealtagroup.com