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. |
Similar financial terms
Unleveraged required returnThe required return on an investment when the investment is financed entirely by equity (i.e. no debt).
Unleveraged beta
The beta of an unleveraged required return (i.e. no debt) on an investment when the investment is financed entirely by equity.
Leveraged required return
The required return on an investment when the investment is financed partially by debt.
Leveraged portfolio
A portfolio that includes risky assets purchased with funds borrowed.
Leveraged equity
Stock in a firm that relies on financial leverage. Holders of leveraged equity face the benefits and costs of using debt.
Leveraged buyout (LBO)
A transaction used for taking a public corporation private financed through the use of debt funds: bank loans and bonds. Because of the large amount of debt relative to equity in the new corporation, the bonds are typically rated below investment grade, properly referred to as high-yield bonds or junk bonds. Investors can participate in an LBO through either the purchase of the debt (i.e., purchase of the bonds or participation in the bank loan) or the purchase of equity through an LBO fund ...
Leveraged beta
The beta of a leveraged required return; that is, the beta as adjusted for the degree of leverage in the firm's capital structure.
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.
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.
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.
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.
