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Portfolio PurchasesThe End of Term ProgramSince the 1980s MLPi has assisted captives and other leasing organizations by acquiring the short-term segment of lease portfolios, including equipment leases that have reached month-to-month status. MLPi’s End of Term (EOT) program allows the selling organization to immediately recognize future revenue for portfolios of older generation equipment and to maximize the cash value of leased equipment which may be at the end of its economic life. MLPi also specializes in purchases of portfolio segments comprised of leases that have one to twenty-four months of initial term remaining, as well as those that have actually reached month-to-month rental status. By focusing on residuals, MLPi offers prices that usually exceed the current committed rental stream. Our purchases are non-recourse, with a complete transfer of risk as well as all administrative responsibilities. Portfolio Acquisition ExpertiseLessors ServedMLPI has acquired lease portfolios from a wide range of sellers:
MLPi’s lease portfolio acquisitions have included a diverse range of equipment:
ScenariosI. Transparent sale to MLPi allows manufacturer to liquidate portfolio while retaining control of customer contacts.This high-tech equipment manufacturer leased a substantial amount of its own product directly to its customers. The manufacturer wanted to accelerate both revenue recognition and cash recovery on the oldest segments of that portfolio while, at the same time, retaining all customer contacts and protecting its ongoing relationships as the provider of equipment maintenance. Moreover, most of the leases had reached month-to-month status with few customers bound by any fixed commitments to continue leasing. Through an End-of-Term sale to MLPi, the manufacturer was able to immediately recognize revenue equal to the residuals it had projected for most of the coming year. Because MLPi’s End-of-Term program focuses on residuals, we were able to structure a purchase, which far exceeded the committed rents on the portfolio. Moreover, circumstances made it possible for us to agree to a transparent arrangement whereby the manufacturer would continue to administer billing and collection of rent. II. Fund Manager accelerates residual recovery while cutting administrative costs. Manager of an income fund had set up a limited partnership several years ago to own and lease equipment to various end users. Over time, the portfolio has contracted as the leases came to term. The portfolio had shrunk to the point where it was no longer cost effective to continue the limited partnership. The fund manager made a decision to liquidate by year-end. MLPi was able to offer the fund manager a price which included – the present value of the committed rents on the leases remaining in the portfolio, the estimated residual value of the equipment and a premium payment for the month-to-month rentals. Our experienced administration staff was also able to assume all lease administration responsibilities well within the fund manager’s timetable. Back to top
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