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Analyzing Transportation Equipment Lessors Oct 98
Standard & Poors, Oct 1998
Abstract
Leasing is a popular means of financing transportation equipment because of its tax advantages and flexibility. In fact, close to half of all aircraft and marine cargo containers worldwide are leased, along with close to half of the world's marine cargo containers. Leasing also finances smaller but significant portions of the U.S. truck and railcar fleets. Companies typically lease equipment when they cannot use additional depreciation deductions for tax purposes. The alternative minimum tax enacted in 1986 raised the break-even point of profitability at which owning becomes attractive, prompting even companies with healthy book incomes to lease much of their new equipment. The lessor receives tax benefits of ownership and passes most of them on to the lessee in the...
Companies mentioned in this report are: AMERCO,GATX Corp.,General Electric Capital Corp.,Hertz Corp.,International Lease Finance Corp.,Sea Containers Ltd.,Xtra Corp.,Enterprise Holdings Inc.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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