Break-even lease payment
The lease payment at which a party to a prospective lease is indifferent between entering and not entering into the lease arrangement. |
Similar financial terms
Break-even analysisAn analysis of the level of sales at which a project would make zero profit.
Break-even payment rate
The prepayment rate of a MBS coupon that will produce the same CFY as that of a predetermined benchmark MBS coupon. Used to identify for coupons higher than the benchmark coupon the prepayment rate that will produce the same CFY as that of the benchmark coupon; and for coupons lower than the benchmark coupon the lowest prepayment rate that will do so.
Break-even tax rate
The tax rate at which a party to a prospective transaction is indifferent between entering into and not entering into the transaction.
Cash-flow break-even point
The point below which the firm will need either to obtain additional financing or to liquidate some of its assets to meet its fixed costs.
True lease
A contract that qualifies as a valid lease agreement under the Internal Revenue code.
Sales-type lease
An arrangement whereby a firm leases its own equipment, such as Acer leasing its own computers, thereby competing with an independent leasing company.
Sale and lease-back agreement
Sale of an existing asset to a financial institution that then leases it back to the user.
Safe harbor lease
A lease to transfer tax benefits of ownership (depreciation and debt tax shield) from the lessee, if the lessee could not use them, to a lessor that could use them.
Operating lease
Short-term, cancelable lease. A type of lease in which the period of contract is less than the life of the equipment and the lessor pays all maintenance and servicing costs.
Net lease
A lease arrangement under which the lessee is responsible for all property taxes, maintenance expenses, insurance, and other costs associated with keeping the asset in good working condition.
Limitation on sale-and-leaseback
A bond covenant that restricts in some way a firm's ability to enter into sale and lease-back transactions.
Leveraged lease
A lease arrangement under which the lessor borrows a large proportion of the funds needed to purchase the asset and grants the lender a lien on the assets and a pledge of the lease payments to secure the borrowing.
Lease Rate
The payment per period stated in a lease contract.
Lease
A long-term rental agreement, and a form of secured long-term debt.
Capital lease
A lease obligation that has to be capitalized on the balance sheet.
Cost of lease financing
A lease's internal rate of return.
Precious Metals Lease
A vehicle or technique used to finance precious metals inventories. It is related to the term structure of precious metals prices.
Zero prepayment assumption
The assumption of payment of scheduled principal and interest with no payments.
Single-payment bond
A bond that will make only one payment of principal and interest.
Production payment financing
A method of nonrecourse asset-based financing in which a specified percentage of revenue realized from the sale of the project's output is used to pay debt service.
Prepayments
Payments made in excess of scheduled mortgage principal repayments.
Prepayment speed
Also called speed, the estimated rate at which mortgagors pay off their loans ahead of schedule, critical in assessing the value of mortgage pass-through securities.
Payment-In-Kind (PIK) bond
A bond that gives the issuer an option (during an initial period) either to make coupon payments in cash or in the form of additional bonds.
Payments pattern
Describes the lagged collection pattern of receivables, for instance the probability that a 72-day-old account will still be unpaid when it is 73-days-old.
Payments netting
Reducing fund transfers between affiliates to only a netted amount. Netting can be done on a bilateral basis (between pairs of affiliates), or on a multi-lateral basis (taking all affiliates together).
Payment float
Company-written checks that have not yet cleared.
Payment date
The date on which each shareholder of record will be sent a check for the declared dividend.
Lag response of prepayments
There is typically a lag of about three months between the time the weighted average coupon of an MBS pool has crossed the threshold for refinancing and an acceleration in prepayment speed is observed.
Balance of payments
A statistical compilation formulated by a sovereign nation of all economic transactions between residents of that nation and residents of all other nations during a stipulated period of time, usually a calendar year.
Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds that began operations in 1984. It includes 14 member banks, nearly 450 participating banks, and is one of the clearing companies within the structure of the Association for Payment Clearing Services (APACS).
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value payments operated by a group of major banks.
Coupon payments
A bond's interest payments.
