Leasing Life Issue: 178 - July 08
CIT Group posts $2.1bn Q2 loss
Second quarter earnings
for CIT Group Inc made
grim reading as the global commercial finance company reported a loss of $7.88
a share.
Including losses from
discontinued operations, the group reported a net loss of $2.1 billion,
compared to a net loss of $135 million or $0.69 per share, in the second
quarter of 2007.
Income from continuing operations of $48.1 million ($31.4 million after
preferred dividends), or $0.12 per share, for the second quarter of 2008 was
down from $352.1 million ($344.6 million after preferred dividends), or $1.76
per share for the comparable 2007 quarter.
Of the results, CIT
chairman and CEO Jeffrey M Peek said: “We will continue to take actions
to right-size the company to enhance profitability. To that end, the sale of
our home lending business, which negatively impacted our earnings and
overshadowed the performance of our core commercial businesses, has eliminated
a major area of risk and uncertainty from our portfolio. In the second half of
this year we will further strengthen our balance sheet, improve our funding
profile and continue to meet the financing needs of our clients.”
Leasing Life Issue: 178 - July 08
Online financing 10% of Syscap’s business
Independent IT finance
provider Syscap has witnessed a sharp increase in online
trading, which now accounts for 10 per cent of business.
Syscap Online sits with the
company’s Option One vendor financing programme,
and since its launch in January has boosted business originated through Syscap Online from £43 million to £53 million.
Functionality includes
instant quotations and full financial propositions, generating cash versus
lease comparisons for every proposal aiding improved ROI. “Our online
tool, particularly when coupled with the other benefits of Option One, enables
resellers to make finance a seamless part of their sales process,” said
Philip White, CEO, Syscap.
“In challenging
trading conditions, this is becoming increasingly important to help resellers
drive business, not only to meet the growing demand for emerging payment models
such as Software as a Service, but to reflect the need for greater access to
finance as a way of making IT more affordable.”
08 May 2008
Carbon Trust now working with more than 200 Local
Authorities to cut carbon and slash energy bills
May 2008
Seventy four more
local authorities from across England
and Scotland
are set to collectively cut their carbon footprints by 518,000 tonnes and energy costs by £50 million by joining the
sixth year of the Carbon Trust’s Local Authority Carbon Management Programme (LACM) which launches today.
The Carbon Trust is
now working with 215 of the UK’s
468 local authorities – around 45 per cent - to assess the risks and
opportunities posed by climate change and develop a robust strategy to
drastically reduce their carbon footprints over a five to ten year period.
Through the
previous five years of the LACM programme, the Carbon
Trust worked with 141 local authorities, identifying annual savings of more
than £70 million and 861,000 tonnes of carbon
dioxide across all sites involved. Many of the new participants can expect to
reduce their energy bills by up to 20 per cent.
Tom Cumberlege, Public Sector Manager at the Carbon Trust, said,
“The financial and environmental incentives to cut carbon are clear.
Local authorities in the UK
are responsible for spend in the region of £1.4 billion every year1 on
energy and through their own operations alone collectively emit nearly seven
million tonnes of carbon dioxide. When it comes to
taking action on climate change, local authorities are in a unique position to
be clear leaders and work together with local businesses and residents. The
Carbon Trust is delighted to be supporting 74 more local authorities in these
efforts.
“The good
news is that energy is one of the largest controllable overheads for councils
and implementing good carbon management can lead to significant cash savings on
bills. As well as releasing funds which can be better spent on resources and
services for local residents, this will also enable councils to cut carbon
emissions and improve their reputation in the community.
Launched in 2003,
the LACM programme is designed to deliver improved
energy management of vehicle fleets and academic, accommodation and leisure
buildings. The programme is supported by a bespoke
toolkit – a web-based manual that gives detailed guidance on the programme’s process and technical advice. It also
facilitates the sharing of best practice between participants, enabling them to
learn from each other’s experience, thereby optimising
results.
The sixth phase of
the Carbon Trust’s Local Authority Carbon Management programme
will run until March 2009.
Footnotes
Notes to editors
• Phase six participants are as follows: Harborough
District Council, East Lindsey District Council, Stoke-on-Trent City Council,
Leicestershire County Council, Norwich City Council, Cambridgeshire
County Council, Ipswich Borough Council, Surrey County Council, West Berkshire
Council, Bracknell Forest Borough Council, Swale
Borough Council, London Borough of Waltham Forest, London Borough of Hounslow,
The Royal Borough of Kensington and Chelsea, London Borough of Hackney, London
Borough of Ealing, Tower Hamlets Council, London
Borough of Hillingdon, Gateshead
Council, Lancashire County Council, Bolton Council, Burnley
Borough Council, Salford City Council, South Somerset
District Council, Bath and North East Somerset Council, Coventry City Council, Solihull Metropolitan Borough Council, North East
Lincolnshire Council, Birmingham City Council, Powys
County Council, Blaenau Gwent County Borough Council,
The Isle of Anglesey County Council, Monmouthshire
County Council, Corby Borough Council, Wellingborough
Borough Council, Nottingham City Council, Erewash
Borough Council, Fenland District Council, Huntingdonshire District Council, Thurrock Council, Dartford
Borough Council, Portsmouth City Council, Gosport
Borough Council, Basingstoke and Deane Borough Council, Test Valley Borough
Council, South Hams District Council, East Devon Council, Vale of White Horse
District Council, Aylesbury Vale District Council, South
Oxfordshire District Council, Forest of Dean District
Council, Stroud District Council, Cotswold District Council, Borough of Poole
Council, Purbeck District Council, West Dorset
District Council, Lancashire Fire & Rescue Service, Greater Manchester County
Fire Service, Merseyside Fire and Rescue Service, Cumbria
Fire and Rescue Service, Cumbria County Council,
South Lakeland District Council, Carlisle City Council, Lake District National
Park Authority, Argyll and Bute Council, Comhairle nan Eilian
Siar, Dumfries and Galloway, Dundee City Council,
East Lothian Council, Moray Council, North Lanarkshire
Council, The Scottish Executive, West Dumbartonshire
Council and West Lothian Council.
The Carbon Trust
• The
Carbon Trust is an independent company set up by government in response to the
threat of climate change, to accelerate the move to a low carbon economy by
working with organisations to reduce carbon emissions
and develop commercial low carbon technologies. The Carbon Trust works with UK business and
the public sector through its work in five complementary areas: insights,
solutions, innovations, enterprises and investments. Together these help to
explain, deliver, develop, create and finance low carbon enterprise.
• The
Carbon Trust is funded by the Department for Environment, Food and Rural
Affairs (Defra), the Department for Business, Enterprise and Regulatory Reform (BERR), the Scottish
Government, the Welsh Assembly Government and Invest Northern Ireland.
CIT Responds to Moody’s Ratings Actions
May 30th
2008
NEW YORK--(BUSINESS WIRE)--CIT Group Inc. (NYSE: CIT), in
response to Moody’s Investors Service’s decision to downgrade its
senior unsecured rating to Baa1 from A3, today issued the following statement:
“We disagree with the ratings actions that Moody’s has taken,
particularly in light of the significant progress we have made to strengthen
our balance sheet, improve liquidity and position CIT for long-term success and
profitability. We have successfully executed on our current strategic
funding initiatives, which have included capital raising, asset sales,
financings and growth at CIT Bank. Over the past 60 days, CIT has:
·
Raised $1.6 billion in new capital;
·
Completed financings of approximately $1 billion, including a
$550 million public equipment securitization;
·
Sold over $2 billion of assets at approximately book value; and,
·
Underwrote $600 million of loans at the CIT Bank.
In addition, the Company continues to advance its other key initiatives,
including the previously announced sale of discrete business units and asset
portfolios.
Our strategic intent is to focus the Company on its
market-leading commercial franchises. Our commitment to strong investment grade
ratings remains, and we believe the financial profile and strength of our
businesses will generate financial results consistent with “A”
rating levels.”
Syscap to offer IPR funding
22 May 2008
Syscap Limited (http://www.syscap.com), the
UK’s leading independent finance provider, announces the launch of a new
service that enables independent software vendors (ISVs) and companies who have
developed their own software in-house, to finance the intellectual property
rights (IPR) of their software. IPR funding is a radical new concept, which
allows companies to realise the value of an asset
that has not traditionally been financeable. The
proceeds can then be used to support upgrade programmes
and grow other areas of the business.
Under the IPR Funding Programme, Syscap
purchases the IPR for an agreed amount and licenses it back to the company for
a monthly fee, over an agreed term. At the end of the agreement, the company is
given the option to recover ownership of the software. In the meantime, the
company receives a cash injection to enable it to develop further software or
invest in business growth. By partnering with Syscap,
ISVs also have the option of using the released capital to fund a subsidised software upgrade programme.
Philip White, CEO of Syscap, says: "Software
developed by an ISV will always have a finite useful working life, so, over
time, a need will arise to move customers onto a new release or platform. Syscap works with ISVs to help with legacy system
transition, by not only acquiring IPR and licensing it back, but by offering subsidised finance to make it very attractive for customers
to upgrade. This incentivised method helps ISVs
transition their customers onto the same product and support contract, more
quickly, resulting in business efficiencies and cost savings. The end-user
customer benefits by getting access to the new features available with the new
release or platform, and the ISV benefits from a longer-term customer
commitment.
"The Office of National Statistics estimated that the economy grew by
£8bn as a result of in-house software development during 2007," adds
White. "Lots of companies invest large sums of money in their in-house
software development. This ties-up cash that could be more profitably used
elsewhere."
Rothschild’s
ABL business sold to GE
Leasing
Life May 6th 2008
GE Commercial Finance’s Business Finance unit, a leading
independent finance provider to UK SMEs, has acquired
Five Arrows Commercial Finance Ltd - a major, UK-based invoice discounter,
asset-based lender and factoring house. Five Arrows Commercial Finance Ltd was
acquired from NM Rothschild & Sons Ltd for an undisclosed sum.
Five Arrows Commercial Finance Ltd is one of the top ten providers of invoice
discounting, factoring and asset-based lending solutions to small and
mid-market businesses in the UK,
with over 400 clients and more than £175 million of assets under
management.
WRAP
Doubles Lessor Panel For Equipment Leasing Scheme:
22
April 2008
WRAP (Waste & Resources Action Programme)
has appointed 10 new lessors to its highly successful
eQuip Residual Guarantee scheme. The new lessors join the 10 existing panel members and will help to
guarantee asset finance as the recycling sector continues to grow.
Doubling the opportunity for recycling businesses to source
finance, the eQuip lessor
panel now also includes: Close Asset Finance Ltd, Clydesdale Bank, De Lage Landen Leasing Ltd, Fortis Lease UK Ltd, HSBC Equipment Finance (UK) Limited,
ING Lease (UK) Ltd, JCB Finance Ltd, KBC Lease (UK) Ltd, Triple Point
Investment Management LLP and Vision Asset Finance Ltd.
Ian Wardle, Head of
Business Support at WRAP, says:
“Since its
inception in 2004, eQuip has made a significant
contribution towards meeting UK
recycling targets. To date, 358 assets have been guaranteed through eQuip, at a value in excess of £21 million. These
assets have already diverted three and a half million tonnes
of waste from landfill and the demand for this type of activity is going to
grow rapidly in the next few years. The extended panel of lessors
will help the recycling sector to keep pace with this demand.”
The eQuip scheme was launched in 2004 to stimulate investment
in the recycling sector and is managed by Cranmer
Lawrence & Company Ltd, the specialist asset management and remarketing
company, on WRAP’s behalf. The scheme offers
Residual Value Guarantees on plant and machinery to lessors
able to provide operating leases to recycling businesses. WRAP determines the
eligibility and level of support to be provided to the lessor
based on the type of asset and purpose for which the asset will be used.
Negotiation and agreement of specific lease terms is left to individual
applicants and lessors.
The extended panel
will work with Cranmer Lawrence to further develop
the eQuip scheme. Further details of eQuip can be obtained from the WRAP website: www.wrap.org.uk.
Editor's
notes:
The 10 new lessors join existing panel members Alliance &
Leicester Commercial Finance plc, Bank of Scotland, Barclays Bank plc, GE
Capital Equipment Finance Ltd, HFGL Limited (BNP Paribas), Kaupthing
Singer & Friedlander Commercial Finance Ltd, SG Equipment Finance Ltd,
Siemens Financial Services Ltd, State Securities plc, System
Rental UK Ltd.
WRAP helps
individuals, businesses and local authorities to reduce waste and recycle more,
making better use of resources and helping to tackle climate change
Established as
a not-for-profit company in 2000, WRAP is backed by government funding from England, Scotland,
Wales and Northern Ireland.
Working in
seven key areas (Construction, Retail, Manufacturing, Organics, Business
Growth, Behavioural Change, and Local Authority
Support), WRAP’s work focuses on market
development and support to drive forward recycling and materials resource
efficiency within these sectors, as well as wider communications and awareness
activities including the multi-media national Recycle Now campaign for England.
More
information on all of WRAP's programmes
can be found on www.wrap.org.uk
General Electric shares tumble most since 1987 on profits warning
By James Quinn, Wall Street Correspondent http://www.telegraph.co.uk/
Last
Updated: 5:06pm BST 11/04/2008
Industrial
and financial conglomerate General Electric rocked global markets today after
it admitted that the global credit crisis will hit its profits this year.
GE,
which owns everything from GE Finance to US television network NBC, saw
first quarter profits fall by 5.8pc as it warned of weakness across its
businesses. The company, the world’s third largest by market value, also
delivered a disappointing forecast for the year ahead, guiding down estimates
for full-year profits.
The Dow
Jones Industrial Average, of which GE is one of the largest constituents, was
knocked for six, trading down as low as 177 points at one stage. But the impact
was felt beyond the US,
with the FTSE100, which had been a relatively positive morning, turning red,
trading down more than 60 points.
Profits fell across GE’s many and
varied divisions, with commercial finance off 20pc at $1.158bn in the three
months to march, while GE Money, its personal financing arm, down 19pc at
$995m.
The
company has been revamping its financial services business, by reducing its
exposure to consumers, particularly those with poor credit ratings. Mr Immelt said its financial
services arm “proved to be difficult in the last two weeks” of
March, whole admitting he had seen a March slowdown in commercial finance.
He added
that the company plans to “de-risk” GE Finance, and will try to
exit volatile consumer finance areas. But it was not just those businesses with
a direct link to the credit crisis that were impacted.
CIT to use emergency credit lines
By James Quinn, Wall Street
Correspondent http://www.telegraph.co.uk/
Last
Updated: 12:32am GMT 21/03/2008
CIT,
America's largest independent commercial finance house, is to draw on $7.3bn
(£3.67bn) of emergency unsecured credit lines in order to keep afloat as
it struggles to raise cash in the open market. The company has a portfolio of
assets worth more than $80bn and is considering selling some of those in an
effort to meet funding requirements.
It is
the latest finance company to be forced to call on emergency funds in order to
continue trading in what appears to be a deepening dislocation in the global
credit markets.
Shares
in CIT, whose portfolio contains $9.2bn of sub-prime mortgages and $11.5bn of
student loans, slumped as low as 44pc, before recovering slightly to trade down
$2.21 at $9.43 in late trading.
Chief
executive Jeff Peek said the decision "was the result of the protracted
disruption in the capital markets as well as recent actions by the rating
agencies".
Earlier
this week, rating agencies Moody's and Standard & Poor's separately cut CIT's long and short-term debt ratings, weighing on the
company's ability to raise money in the short-term commercial paper markets.
Last
month, CIT warned that it raised only $2.7bn of the $6bn-$8bn it estimated it
would need in the first six months of 2008. Under normal circumstances, the
company would not have a problem, given that it is expected to generate $24.7bn
from leases and other assets this year, and needs to repay only $15bn.
CIT,
whose major assets include an aircraft leasing portfolio as well as a
considerable financial services book, may now try to pledge some of its assets
as security in return for secured lending in addition to finding alternative
funding methods.
March 2008 – Bank
of Scotland
withdraw from public sector operating lease market.
NHS PASA has received confirmation that the Bank of Scotland is to withdraw
from the operating lease market. The following statement was received from the
bank on 5 March 2008:
"Following a comprehensive strategic review of our Public Sector
Leasing business, it is with regret that we must advise that we have taken the
decision to exit the public sector operating lease market as of 30th May 2008.
With the exception of existing commitments, no new tenders will be accepted
from today's date. We will, of course, in the interim continue to process any
pending business and maintain the excellent customer service that has
previously been delivered. Our Asset Management Department will continue to
manage all assets under existing agreements through to expiry. We would
therefore be grateful if you could advise all of your contracted authorities
accordingly.
2008.02.25,
Kaupthing announces the final
phase of the restructuring of its UK business
As the final step
in the restructuring of the UK business following Kaupthing's acquisition of
Singer & Friedlander in 2005, Kaupthing Singer & Friedlander announces
that it will be exiting its Asset Finance and Commodity Trade Finance
businesses and that it has made structural changes within its Banking Division.
Following the
restructuring Kaupthing Singer & Friedlander will be purely focused on
providing integrated financial services to small and medium sized businesses
and high net worth individuals through its five core business segments; Banking,
Investment Banking Treasury, Capital Markets and Asset Management & Private
Banking.
Asset Finance
(Corporate Asset Finance, Healthcare Asset Finance and Insurance Premium
Finance) and Commodity Trade Finance are non-core to Kaupthing Singer & Friedlander
and have been operating largely on a standalone basis. Exiting these businesses
will have a positive impact on the cost base and will free up liquidity in
excess of GBP 1 billion (EUR 1,3 billion) in 2008. The capital released will be
reinvested to further grow the core UK business. After the divestment there is
no longer any significant asset finance business within the Kaupthing group.
In addition
Kaupthing Singer & Friedlander has transferred the Structured Finance
division from Banking into the Acquisition and Leveraged Finance division
within Investment Banking. Kaupthing Singer & Friedlander will also close
its Property and Corporate Banking activities in Leeds and Manchester and move
them to Birmingham and London.
