I don't think so.
Investors are getting a 9% or thereabouts return on their Capital investment. By the end of the lease, they may very well
have recovered an amount of money equivalent to their investment, but what about the return of the capital? Normally
what investors get is their return on investment plus they get their capital back. The sale at the end of the lease is their
capital back, so depends heavily on the residual value of the 380, which is unknown. Of course there are other things
that can be done such as re-leasing the residual, so it is not all doom and gloom, but it is risky. This is why they can get
twice the current bank rate.
The higher return on their capital reflects the higher risk. If Doric or Amedeo could attract investors with this level of risk
for 5% they would.
The only Caveat I would put on this is that I haven't seen the details of the lease agreement, but I strongly doubt, the
investors will have recovered their Capital by the end of the lease, they will only get the equivalent of a very good interest return,
until the frame is sold.
|Quoting planesmart (Reply 195):|
At end of lease, for tax purposes, it may suit some investors not to have a final payment.
Not unless the tax rate is over 100%, which I understand is possible in some European countries, but releasing the
residual may be more attractive then taking the cash.