Repayment Discussion – Cash Flow
Repayment Discussion – Cash Flow:
Collection of lease payments and earnings from the sale of equipment are the primary source of repayment. Management Case Discussion:
Management does not and is not required to prepare projections. However, profits are expected to remain stable or increase since the Investment in Direct Financing Leases asset on the balance sheet continues to increase. This asset is a proxy for future performance since it is the PV of all future minimum Direct Finance lease payments. Many of these Direct Finance leases also convert to lucrative operating leases at the end of the initial term.
Bank Case Discussion:
N/A
Downside or Breakeven Case Discussion:
Assuming DSC does not initiate another lease and all cancelable …show more content…
o Lease A/R Aging Report by customer o International Lease A/R Aging Report by customer o Parts and Sales A/R Aging Report by customer o Security Interest Pledge Certificate
• The borrowing base is calculated based on the items in the table below. See the collateral tables above and the 9/30/17 borrowing base documentation attached for additional detail, and the additional commentary throughout this section on ineligible items. o The total availability at 9/30/17 was $123MM and the outstanding loan balance was $102.5MM, resulting in net availability of $20.5MM.
• Wells Fargo is identified as Lender Loss Payee on the property insurance. Collateral Exam (4/3/17)
• A field exam is conducted annually by Wells Fargo (the latest of which is attached) and all advance rates are supported.
• A lease file review was completed on ten files for adherence to the company's credit policies. Overall, the results were deemed satisfactory with qualifications, but the following findings were
Repayment Discussion – Cash Flow:
Collection of lease payments and earnings from the sale of equipment are the primary source of repayment. Management Case Discussion:
Management does not and is not required to prepare projections. However, profits are expected to remain stable or increase since the Investment in Direct Financing Leases asset on the balance sheet continues to increase. This asset is a proxy for future performance since it is the PV of all future minimum Direct Finance lease payments. Many of these Direct Finance leases also convert to lucrative operating leases at the end of the initial term.
Bank Case Discussion:
N/A
Downside or Breakeven Case Discussion:
Assuming DSC does not initiate another lease and all cancelable …show more content…
o Lease A/R Aging Report by customer o International Lease A/R Aging Report by customer o Parts and Sales A/R Aging Report by customer o Security Interest Pledge Certificate
• The borrowing base is calculated based on the items in the table below. See the collateral tables above and the 9/30/17 borrowing base documentation attached for additional detail, and the additional commentary throughout this section on ineligible items. o The total availability at 9/30/17 was $123MM and the outstanding loan balance was $102.5MM, resulting in net availability of $20.5MM.
• Wells Fargo is identified as Lender Loss Payee on the property insurance. Collateral Exam (4/3/17)
• A field exam is conducted annually by Wells Fargo (the latest of which is attached) and all advance rates are supported.
• A lease file review was completed on ten files for adherence to the company's credit policies. Overall, the results were deemed satisfactory with qualifications, but the following findings were