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Cross-border business is entering the mainstream. AFI reports from the biggest big-ticket leasing conference to date.
The attendance roll read like an IRS hit list. With 170-plus delegates the 3rd annual Asset Finance International big-ticket leasing conference and deal of the year awards -- held at the Hyatt Carlton in Knightsbridge, London, on March 11-12 -- brought together some of the biggest names in cross-border business from both sides of the negotiating table.
The record attendance mirrored a year of cross-border groundbreakers -- both structural and in deal volume. A growing range of new equity providers and lessees from sectors that were untapped until two years ago has almost trebled the size of the market since 1995.
And, as Kelsey Lennox, vice president at Citicorp Securities, noted, given that "almost 100% of investors complete another crossborder transaction after closing their first deal, and enter into increasingly complicated structures," any change in lease legislation in the major markets is not going to stop the dealflow -- albeit, as Linda Kraushar, vice president at Chase Securities, intimated, "leasing in a different form".
Big-ticket leasing is becoming accepted as a mainstream structured finance product. Kraushar quoted Peter Drucker's Practice of Management: Any enterprise has two, and only two, basic functions marketing and innovation. The crossborder marketing is still missing. But innovation -- as AFI's deals of the year (See Asset Finance International, March 1998, page 22 ) demonstrated -- is racing forward with new structures into first-time markets.
Lease packages now range from $100 million to $2 billion and the international power and utilities markets (in Europe and to a lesser extent Asia) are beginning to rival transportation for volume and sophistication. Even in the established transport sectors new assets are coming to market: rail infrastructure and real estate, port equipment, airports, more shipping and Asian rolling stock.
With that diversification the equity base for cross-border product is widening. In the US, banks and leasing companies invest as a main business line. But even that profile has changed. From seven main US leasehold investors in 1995 -- six of which were super-regional banks -- there are now 34 of which 14 are regional banks, three are money centre banks, seven are super regionals, three industrial...