| Daily news for the equipment finance sector |  |
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- Nissan to lease battery in electric car Leaf
In Nissan Motor's electric automobile Leaf, the company will lease the battery to buyers, who will own the rest of the car, the automaker said at the launch of the model. The batteries, which Nissan will produce through a joint venture with NEC, are so costly that by keeping ownership of them, Nissan can produce the car at a price comparable to that of gas-powered automobiles. Nissan can also upgrade the battery as it makes improvements. Wired.com
(11/13)
    
- GE to form avionics joint venture in China
General Electric will form a joint venture with Aviation Industry, a Chinese state-owned aircraft maker. The venture will target China's commercial-aircraft market. One of its first projects is to provide equipment for the C919 passenger jet, which is being developed by Commercial Aircraft Corporation of China, another state-owned firm. Reuters
(11/14)
- Lessor DAE inks deal with International Aero Engines
Aircraft lessor Dubai Aerospace Enterprise signed a deal worth $340 million with International Aero Engines, a consortium led by Rolls-Royce and Pratt & Whitney. The deal is for Airbus A320 aircraft engines, to be delivered in 2011. The company "selected the v2500 Selectone engine to power 20 new airbus A320 family aircraft," according to a statement. ABC News/Reuters
(11/15)
- CIT Group's credit default swaps to be auctioned
Credit default swaps from small-business lender CIT Group, which filed for Chapter 11 bankruptcy, will be auctioned Friday, the International Swaps and Derivatives Association said. About $3 billion in swaps will be auctioned off. CIT filed for bankruptcy Nov. 1, with $38 billion in outstanding debt. WorldLeasingNews.com
(11/13)
- NetSol revenue falls in fiscal Q1
NetSol Technologies reported its revenue for the 2010 fiscal first quarter. The company saw revenue of $7.6 million, down 18% from the same period the previous year. Its net loss was $264,000, or about 1 cent per share. CEO Najeeb Ghauri said higher licensing fees for NetSol's Financial Suite software boosted revenue from the previous quarter. CNBC/The Associated Press
(11/12)
| Market Trends | | |
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- Airbus, Boeing forecast recovery for airlines next year
Executives at Airbus and Boeing said airlines are no longer delaying orders, a signal that the industry's slump is ending. Economic growth in 2010 is expected to help airlines repair their balance sheets, said Randy Tinseth, Boeing's head of marketing for commercial planes. "Next year will be a year of recovery, and in 2011, airlines will return to profitability," Tinseth said. Bloomberg
(11/16)
- Moody's: Corporate defaults to peak this month, then ease off
Moody's Investors Service is becoming a bit more optimistic on the subject of corporate-debt defaults. Moody's warned in January that as much as 16.4% of companies carrying junk ratings could default during the next 12 months. The credit rating agency upgraded its prediction, expecting defaults to peak at 13.6% this month, then decline to 4.4% a year from now. The Wall Street Journal
(11/16)
| Government & Regulatory | | |
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- Colorado banks still hesitant about SBA loans
Bankers in Colorado are still hesitating to make Small Business Administration loans. The picture is improving: Banks had issued $1.2 million worth of loans through the America's Recovery Capital Loan Program by October, putting Colorado at about the midpoint of lenders in the program. But bankers in the state complain that the program involves too much paperwork and, even with the SBA guarantee, means putting risky loans onto their books. The Denver Post
(11/14)
- Fed's Hoenig urges policymakers to allow firms to fail
Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, said financial institutions, regardless of their size, should be allowed to fail if necessary. "As we look at reform and the way forward, I think the most important thing we need to do is to make, first of all, an accurate assessment of fundamental weaknesses in our financial system and then begin to create better foundations," he said. Hoenig also said "significant weaknesses" continue to plague the economy. CNBC/Reuters
(11/16)
| Best Practices | | |
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- The dangers of execution without leadership
Fewer than half of managers said it is their duty to inspire workers or provide direction during a crisis, according to a McKinsey study. The study indicates that managers show a bias for simply "getting things done," writes leadership coach John Baldoni. But focusing only on execution "will not provide a foundation for what organizations really need to do, and that is to grow," he writes. HarvardBusiness.org/Leadership at Work blog
(11/13)
| ELFA News | | |
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Maine law on lease tax put on hold
The ability of citizens in Maine to bring laws up for a "people's veto" means newly passed tax reform altering sales tax application to lease agreements will not take effect until voters pass judgment in a referendum on the June ballot. Maine LD 1495/Public Law Chapter 382 was scheduled to go into effect Jan. 1 for most transactions and April 1 for leasing, but enough signatures were filed on petitions to stay the law. Supporters of the tax bill are questioning the validity of the petitions and examining other options to prevent the issue from appearing on the June ballot. Additional information is available from the Kennebec Journal and Bangor Daily News.
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2009 Survey of Equipment Finance Activity
ELFA's premier benchmarking survey has been released. This survey covers all aspects of the equipment-finance industry, and it is a must-have if your organization wants to benchmark itself against its peers. The survey presents the most comprehensive industry-performance metrics available.
Following global economic trends, 2008 was a difficult year in equipment finance. Total new-business volume dropped 2.2% overall for survey respondents. Pretax income and net income decreased both in dollar value and as a percentage of total revenue. Financial measures such as return on average assets and return on average equity dropped to their lowest levels in at least 10 years of the survey. Total headcount decreased. Delinquencies and full-year losses, or charge-offs, were on the rise.
There are glimmers of hope. While there was an overall drop in new-business volume, more than half of the respondents experienced volume growth in 2008. Pretax spreads increased after four years of compression. And while overall headcount decreased, employment did grow in credit approval and the collections and workouts area. ELFA members are focused on risk management, priming their organizations so they are ready to respond when businesses shed the paralysis caused by uncertainty and begin to invest once more.
ELFA member-respondents were sent complimentary copies of the survey report. In addition, confidential data sheets on individual companies, which show individual statistics ranked against a peer group, were sent to all respondents. Nonrespondents may purchase the report from ELFA.
For more information or to receive the table of contents for the report, contact Bill Choi at (202) 238-3413 or bchoi@elfaonline.org.
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