Exam (elaborations)
CLFP EXAM (Sources of Financing) with Questions & Answers Graded A
- Course
- Institution
CLFP EXAM (Sources of Financing) with Questions & Answers Graded A
[Show more]
Seller
Follow
Content preview
CLFP EXAM (Sources of Financing)with Questions & Answers Graded
A
What determines the quality of the debt available to a lessor? - ✔✔1.) reputation
2.) Amount of capital
3.) Historical stability
4.) Integrity of financials
5.) Cash flow
6.) Type of leases
7.) Originations - now and projected
8.) Size of portfolio
9.) Servicing/remarketing capabilities
10 Tax, credit, financial and business risks
What is Subordinated Debt? - ✔✔1.) One level up from equity, a form of debt viewed as equity
from the lender perspective
2.) In liquidation, subordinated debt holders are paid after secured and unsecured lenders.
3.) For closely held companies, typically supplied by ownership
4.) For larger companies, private equity, commercial finance firms, insurance or pension funds
5.) cost significantly higher than senior debt
What are Revolving Lines of Credit? - ✔✔1.) Used to manage the funding and liquidity
requirements of leasing operation.
, 2.) temporarily fund or warehouse until permanent financing is established
3.) supplied by commercial banks with pricing tied to index
4.) typically one year notes
How do Revolving Lines of Credit function? - ✔✔1.) lender does not typically underwrite transaction
2.) lenders does not fund or take security interest in individual transaction
3.) lender takes a general pledge of lessor assets
4.) availability based on borrowing base certificate provided monthly
5.) BBC includes net investment
6.) Lender often requires over collaterilization - 70-90% of underlying cost
7.) as lease are sold, line is repaid
How does Permanent or Term Debt function? - ✔✔1.) simple - single lease single note
2.) complex - bungle leases into one note with common/blended characteristics
3.) limited advance amount to less than the investment
4.) should lesse default - note is to be repaid.
5.) lessor is responsible for servicing
How does Asset Securitization compare with Lines & Term Debt? - ✔✔1.) different
lenders 2.) more complex
What are Commercial Paper Conduits? - ✔✔1.) Originator -> Conduit -> Investor;
2.) Facilities whereby lessor can participate in the issuance of commercial paper or company
issued short term debt
3.) Conduit means there is only one issuer, but many participating originators
4.) Conduit aggregates paper from many originators and issues commercial paper
5.) complex with up front legal cost and usually > $50MM transactions
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller KenAli. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $12.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
79650 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now