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Kit Menkin’s Leasing News www.leasingnews.org Tuesday, May 14, 2002 Accurate, fair and unbiased news for the equipment Leasing Industry Headlines---- GE Capital Expects To Issue Up To $70 Billion In New Debt BancPartners Texas Office David Mayer Monthly News Letter Bridge Transport Complaint CIT---Where are You? Parker Leasing McCue Correction Leasing Rules for Phone Start-Ups Are Upheld Retail sales up 1.2 percent in April, best showing in six months Tech Data U.S/American Express New Leasing Program for Technology Resellers DVI Reports QIII Net Loss of $9.2 Million
### Denotes Press Release -------------------------------------------------------------------------------------- GE Capital Expects To Issue Up To $70 Billion In New Debt By Carrie DeLeon, Dow Jones Newswires GE Capital, the financing arm of GE, said it expects to issue between $50 billion and $70 billion in long-term debt during the remainder of 2002. The proceeds from such issuances will be used to reduce the amount of commercial paper outstanding, to fund maturing long-term debt and fund additional asset growth, GE said in its quarterly report filed with the Securities and Exchange Commission. GE Capital said it plans to reduce the ratio of commercial paper to outstanding debt to about 25% to 35% by the end of 2002. At the end of the first quarter, GE Capital also had about $101 billion of commercial paper outstanding, representing about 42% of its total debt outstanding. The company said in March that GE Capital issued $25 billion of long-term debt during the first quarter, and expected to issue another $25 billion in long-term debt in the second quarter. The company said it used funds from the first quarter offering to reduce the amount of commercial paper outstanding and to fund maturing long-term debt. Earlier, Xerox announced it received $496 million in financing from GE Capital. GE Capital also said in the filing that it's in the process of increasing its committed lending agreements to about $50 billion, from about $34 billion at March 31. BancPartners Texas Office Warren Hawkins, president of BancPartners, closed the Lewisville, Texas office and moved it to Austin, Texas. “Steve Logan has made arrangements with the Texas Independent Bankers Association, who has 600 customers with 900 banks, “ he explained. “Steve has signed twelve banks to date. It takes three to six months to make this work. “Jim Lahti was great with brokers, and great to work with, “ he added.” But we do best with community banks. Our program is with community banks. Working with brokers was not our niche... I wish Jim and Rick Gatelli the best as they understand that marketplace. “We did over thirty million last year, “ Hawkins said. “ We will do over thirty-eight million, maybe more, by specializing in community banks. This is what we do best, and that’s what we want to stick with.” Jim Lahti and Rick Gatelli have gone back to their old stomping grounds as Affiliated Corporate Leasing Services. http://www.bancpartners.com/ ------------------------------------------------------------------------------------- David Mayer Monthly News Letter Your readers can click on http://www.pblaw.com/newsletters/bln/Release/bln_2002_05.htm for the May Newsletter and click on http://www.pblaw.com/newsletters/bln/ for the web site. Regards, David David G. Mayer Patton Boggs LLP 2001 Ross Avenue Suite 3000 Dallas, Texas 75201 Tel: (214) 758-1545 Fax: (214) 758-1550 Author of: Business Leasing For Dummies Publisher of: Business Leasing News (This is an excellent newsletter, worth your trip to the website. editor ) Bridge Transport Complaint Thank you again for printing our fraud alert for Bridge Transport in North Carolina. The response of your subscribers and the information shared has allowed us to pursue this case. Yesterday we had a 2-hour interview with the FBI in Buffalo, New York who took all the information we compiled from our transaction along with the shared information from your readers. This report was requested by the FBI in North Carolina. Their intent is to present this to the Grand Jury for prosecution. I know there are some who feel this type of public alert may have some privacy issues, but I still feel, if the leasing industry shares alerts we can stop some of the fraud. The fraudulent party is not going to test the privacy issue nor will he read it. Thank you again for your commitment to publish news that can only help the leasing industry. John Gallo President john@mcleasing.com M & C Leasing Co., Inc. 85 River Rock Drive Suite 104 Buffalo, New York 14207-2170 (P)1-800-416-9080 (F)1-716-873-1002 CIT---Where are You? Regarding the item on your site Monday about CIT... "A new development: they can go to the Tyco Yahoo to learn about stock, but are now being blocked from posting comments on Yahoo." CIT employees can post and read comments from the Lessors Network "CIT" discussion form when using personally owned computers. The company can't block us. Regards, The Lessors Network (CIT readers reach us via www.leasingnews.org or their home e-mail address. www.lessors.com has special bulletin boards and CIT employees who would like to communicate with each other may register under any name they would like to choose. editor) ---- Parker Leasing If Parker is turning out 35 new brokers a week, Glasgow should take his course.
As for me, I would like to clarify that I am Director of Verbal Retribution only. Physical Retribution requests should be directed to "Sumo Bob" in Pennsylvania. Ken Goodman --- You do a great service to all of your readers. Regarding Paul Parker. I was one of the lucky ones, I didn't fall for his line of international funding. A note of praise for Bob Baker, Wildwood. He has the classiest programs available for anybody who really wants to learn the leasing business. When I can afford it, he will be the very first person I contact.
Paul Bachrodt ----- McCue Correction Kit - Just wanted to let you know that the first line of today's item about McCue Systems' ad reads: "Today magazine announced McCue Systems advertising was ranked #1 among all..." Some how this got truncated along the way. The actual item as I sent it to you reads: "In the annual Ad Perception Survey conducted for the ELA's Equipment Leasing Today magazine, the advertising of McCue Systems was ranked #1 among all..." We really wouldn't MIND being recognized by TODAY Magazine, however! Andrew Andrew Lea, Director, Marketing and Corporate Communications McCue Systems, Inc. andrewl@mccue.com (Truncated---I like that, much better than an error. McCue has been around a long time, and the former general manager of American Leasing, Gail Whitehouse, enjoyed working for McCue before coming here. It was the traveling, and also wanting to have a family, and she always spoke very highly of John McCue and his company. editor ) Leasing Rules for Phone Start-Ups Are Upheld By STEPHEN LABATON New York Times WASHINGTON,— The Supreme Court handed a huge victory to start-up telephone companies by broadly affirming rules that permit them to lease equipment from the largest phone companies at relatively low costs. The pricing regulations are meant to let rivals viably compete with the entrenched local phone companies by leasing access to their networks rather than having to build expensive duplicate systems. Although local telephone competition has been slow to catch on for a variety of reasons, rivals have blamed the intransigence of the dominant local companies. The established telephone companies had argued that the rules, which grew out of the Telecommunications Act of 1996, forced them to give competitors access to their networks at unfairly low prices. While the decision was largely about the arcane issue of accounting practices for telephone companies, it has significant implications for competition in the local phone markets. The rate formula helps determine a number of market issues, including which companies will enjoy greater profits, whether smaller local companies are able to survive and effectively compete, and the extent to which the larger companies are willing to make capital investments. The largest regional telephone companies — Verizon, SBC Communications, BellSouth and Qwest — had argued that the standards permit leasing fees that are so low that neither they nor the smaller challengers would have a financial interest in investing to build and improve their networks. The smaller rivals had argued that formulas proposed by the incumbents would lead to higher fees that would eviscerate the deregulatory goals of the Telecommunications Act, driving them out of business and leaving the local markets exclusively in the hands of monopolists. By a vote of 7 to 1 the court sided with the smaller companies and upheld the rate-setting standards approved by federal regulators that determine how much the big players are paid for renting various pieces of their networks to their smaller rivals. The court also voted 6 to 2 to uphold the federal rules that require the incumbent telephone companies to combine various elements of their networks when the start-ups cannot bundle it themselves. But the court's opinion, by Justice David H. Souter, was not necessarily the last word. Lawyers for the companies have petitioned the Federal Communications Commission to rewrite the rules in ways more favorable to them, and some company lawyers raised the prospect of bringing more legal challenges to rates that they say are unfair. The head of the F.C.C. suggested he was in no rush to consider a blanket overhaul of standards that could lead to greater confusion and uncertainty in markets that have been roiled by years of legal challenges and lobbying. "This decision brings much-needed additional certainty to the legal landscape and should advance the commission's efforts to carry out the statute's competition goals," said Michael K. Powell, the F.C.C. head. The decision was the latest in a line of ferocious litigation and lobbying arising from the Telecommunications Act. It has largely failed to meet one of its central goals of quickly deregulating markets and introducing competition to areas that have been dominated by the regional telephone monopolies that were created by the breakup of AT&T. Because of the prohibitively expensive costs associated with building a new nationwide telephone network from scratch, the act required the regional phone companies to lease their equipment to rival companies to promote competition. While experts agree that the telecommunications act has failed to fulfill its promise of leading to more vibrant and competitive markets, there is widespread disagreement as to the causes. Some have attributed the failure to the problems of the law and the way it has been applied. Critics have also said it has promoted a wave of corporate consolidation that is anticompetitive. And some have attributed the failure of deregulation to the regional Bell companies, which have moved slowly in opening their markets and repeatedly challenged provisions and regulations and created a climate that has discouraged greater investment by challengers. Recent industry reports filed with the government show that only three million residential customers out of 150 million are using the facilities of the competitive rivals, and most of those are not from telephone companies but from cable companies offering telephone service. Challengers to the regional Bell companies hailed the decision in Verizon v. F.C.C., No. 00-511, as a victory for consumers, who they said would benefit from increased competition and greater certainty about rules that have been the subject of legal challenges from the day they were adopted. "The United States Supreme Court rebuffed yet another Bell company attempt to regain their stranglehold on U.S. telecommunications by rewriting the telecom act," said Royce J. Holland, chairman and chief executive of Allegiance Telecom, a smaller local exchange carrier in 36 markets. "Today's decision is a victory for consumers and competition and a defeat for remonopolization." The incumbents had argued unsuccessfully that the rate-setting standards were so low as to be confiscatory, and that they would discourage both large and small companies from making future investments in upgrading telephone systems. "Today's decision maintains an unfortunate status quo — BellSouth must continue to provide pieces of its network to competitors at below-cost prices," BellSouth said. "This status quo discourages investment by us and our competitors, resulting in poorer choices for consumers." ______________________________________________________________ . Retail sales up 1.2 percent in April, best showing in six months
By Jeannine Aversa ASSOCIATED PRESS WASHINGTON – After a tightfisted March, U.S. consumers splurged in April and pushed retail sales up by 1.2 percent, the biggest increase in six months. The latest sales snapshot released by the Commerce Department Tuesday suggests that consumers – the lifeblood of the economy – are helping to support the budding economic recovery by keeping their pocketbooks and wallets open. The April advance came after retail sales nudged up by 0.1 percent in March and was stronger than the 0.6 percent gain many analysts were forecasting. Consumers, whose spending accounts for two-thirds of all economic activity in the United States, snapped up cars, building materials, garden supplies and health care and beauty products last month. They also ate out more. Higher prices at the pump for gasoline also contributed to the increase in overall retail sales in April. However, excluding sales at gasoline stations and at car dealerships – which tend to bounce around from month to month – retail sales still rose a solid 1 percent. The 1.2 percent increase in retail sales last month was the biggest gain since a record 6.2 percent in October. "Consumer will once again play Atlas and support the economic recovery," said economist Richard Yamarone, with Argus Research Corp. The strong showing last month came despite the fact that the nation's unemployment rate jumped to an eight-year high of 6 percent during the month. And, there was unseasonably cold weather and the fact that Easter fell in March this year. Tuesday's report showed that car sales went up 1.9 percent in April, following a 0.8 percent decline in March. Sales of building materials and garden supplies rose 2.7 percent, on top of a 1.7 percent gain. At health and beauty stores, sales rose 1.9 percent, a turnaround from the 0.5 percent drop in March. Sales at clothing stores rose 0.7 percent, compared with a 0.3 percent dip. At department stores, sales increased 1.2 percent, after edging up 0.1 percent. Sales at gasoline stations rose 2 percent, following a 4 percent increase. Increases in recent months reflect higher prices at the pump. At bars and restaurants, sales rose 0.6 percent, after being flat. Sales of electronics and appliances nudged up 0.1 percent, after being flat in March. There were some weak spots. Sales of furniture and home furnishings dropped by 1.4 percent, following a 0.1 percent decline the previous month. Sporting goods stores saw sales dip 0.1 percent, after a 0.6 percent increase. Concerns about how consumers, who kept on spending during the recession, will hold up during the recovery was a factor in the Federal Reserve's decision May 7 to keep short-term interest rates – now at 40-year lows – unchanged. The Fed has held rates steady at all three of its meetings this year and many analysts say the central bank will not begin to push rates higher until fall, after unemployment peaks and begins to improve. Economists expect the nation's jobless rate will top out at around 6.5 percent in June or July. Economists worry that rising unemployment might make consumers scale back. Low interest rates, however, might persuade them to keep on buying and help along the economic recovery. Last week, the nation's largest retailers, including Wal-Mart and Target, said April's sales were dampened by cool weather and the earlier Easter, making shoppers less inclined to hit the malls. Tuesday's report painted a brighter picture than that provided by the biggest retailers in party because the government report is broader and includes car sales and sales at gasoline stations – both of which showed strength in April, Yamarone said. Still, he noted, the government data showed widespread gains for many retailers. ___________________________________________________________________ #### ###################################### ######### Tech Data U.S. and American Express Introduce New Leasing Program for Technology Resellers New Suite Of Leasing Tools Enable Resellers To Provide Customers
With Appealing Financing Options For Equipment Acquisitions
CLEARWATER, Fla / -- Tech Data Corporation (Nasdaq:TECD), a leading worldwide provider of IT products, logistics management and other value-added services, has enhanced its credit services offerings through a uniquely tailored agreement with American Express Business Finance. The agreement enables Tech Data resellers to provide additional leasing and credit options to their end-user customers through American Express Business Finance's suite of business leasing solutions.
The agreement allows resellers to develop customized lease programs for large technology equipment sales where credit terms up to $250,000 can be approved through instant credit decisioning that is based on information provided by the customer in the application rather than the end-user's financial statements. Once a customer is approved by American Express, additional equipment may be leased by that customer with as little as a single signature. Resellers can also utilize new tools such as an online lease calculator, enabling them to view their customers' lease and payment information over the Web.
"Leasing options allow VARs to offer their customers flexible payment options at the beginning of the sale, and create opportunities to generate additional sales on upgrades or new products at the end of the lease," said Mike Zava, vice president of U.S. credit services. "Our reseller customers continue to rely on our credit department for finance programs that help them provide unique payment options that result in higher account satisfaction and healthy margins."
According to IDC, many large and small businesses lease technology products to conserve capital. Lease payments allow for equipment acquisition that would be too much of an investment to purchase in one transaction while also alleviating spikes in the customer's IT budget.
"We are looking forward to offering this new leasing option to our customers since it allows us to provide enhanced credit alternatives for potential sales," said John Gray of Computer Hardware Service. "Our business is extremely focused on building customer relationships and this new program from Tech Data Credit Services allows us to concentrate on new accounts while maintaining loyalty with existing clients."
Tech Data Credit Services
Tech Data's Credit Services organization helps its reseller customers successfully develop their end-user accounts through a variety of finance and credit programs. Services offered include unique "assignment of proceeds" alternatives, open account terms, inventory financing, accounts receivable financing, leasing, joint purchase orders, escrow, direct debit, and electronic funds transfer. For more information, call 800-553-7921, option 3.
American Express Business Finance
American Express Business Finance Corporation is a division of OPEN: The Small Business Network(R) from American Express that provides fast and reliable financing for business equipment through enrolled vendor partners. OPEN: The Small Business Network from American Express offers small business owners a wide range of tools, services and savings designed to meet their evolving needs, including convenient access to working capital and credit information, instant decisioning on all card products and savings on business services from an enhanced lineup of OPEN Network partners. To obtain more information about the OPEN Network, visit www.OPEN.americanexpress.com or call 1-800-Now-OPEN to apply for a card or loan.
About Tech Data
Tech Data Corporation (Nasdaq:TECD), founded in 1974, is a leading worldwide provider of IT products, logistics management and other value-added services. Ranked 117th on the Fortune 500, the company and its subsidiaries serve more than 100,000 technology resellers in the United States, Canada, the Caribbean, Latin America, Europe and the Middle East. Tech Data's extensive service offering includes pre- and post-sale training and technical support, financing options and configuration services as well as a full range of award- winning electronic commerce solutions. The company generated sales of $17.2 billion for its most recent fiscal year, which ended January 31, 2002.
SOURCE Tech Data Corporation ########## #################################### DVI Reports QIII Net Loss of $9.2 Million DVI, an independent specialty finance company for healthcare providers worldwide, reported the results for the third quarter and the first nine months of its fiscal year 2002. For the quarter ended March 31, 2002, the Company reported a net loss of $9.2 million, or $0.64 per diluted share, compared to net earnings of $5.0 million, or $0.33 diluted earnings per share for the same period in its previous fiscal year. The current year results reflect $15.7 million in charges relating to the Company's operations in Argentina and the impairment of its investments in Corvis Corporation and Claimsnet.com. Net earnings for the nine-month period ended March 31, 2002 were $3.2 million, or $0.22 diluted earnings per share, compared to net earnings of $12.7 million, or $0.84 diluted earnings per share for the nine months ended March 31, 2001. Book value per share at March 31, 2002 was $16.05 and managed net financed assets at that date were in excess of $2.5 billion. Michael A. O'Hanlon, president and chief executive officer, commented, "The charges for the Argentinean operation and the impairment of investments were not unexpected and are the result of continued economic decline in two unrelated markets. We have provided details on both of these matters in a previous release." O'Hanlon commented further, "DVI is having a very good year, driven by strong business activity in a healthcare environment that continues to expand dramatically. New loan origination and credit commitments for the quarter of $331 million increased 22% this quarter compared to the third quarter last fiscal year. For the nine months to date, total originations were an impressive $967 million, up 33% over the same period last fiscal year. The outlook for the healthcare sector is excellent, and DVI intends to take full advantage of the growing opportunities to build its earnings base and expand its unique market position." Additional information is available at www.dvi-inc.com. ### ################################### ########## -------------------------------------------------------------------------------------------------- To reach Leasing News, please e-mail kitmenkin@leasingnews.org or use the contact form at www.leasingnews.org Fax messages are often difficult to read. Telephone calls result in “telephone tag” and often take longer to respond due to time differences and limited time. E-mail is always best. Leasing News is sent ONLY to people who have requested it. We do not spam. You register using our website www.leasingnews.org or contacting kitmenkin@leasingnews.org. . Our subscriber list is NOT made available to the third parties. Subscription and Removal Assistance can be accessed through out contact site at www.leasingnews.org or you may directly contact kitmenkin@leaisngnes.org with you name as you registered it along with you-mail address ( our list is kept by the name registered, not by company or e-mail address. We have great difficulty in finding your e-mail address without your name. If you have signed up and are not receiving Leasing News, your carrier may be blocking the "mass mail". You may notify your carrier or send an e-mail to us for verification, if needed. Online version of this publication is at http://www.leasingnews.org. Policy Statement Policy Statement---Nothing is sent out that is not "fair." Always unbiased reporting. Fairness always. If it is questionable, we will ask the writer's permission to quote them. We will print information without attribution, but feel as long as we do not name the person who sent it, we can use the information. Any information we think is suspicious, we try to have if substantiated first by at least two reliable people. We will not purposely send out "negative" news. We prefer "positive" news. We have no "axe" to grind or are not paid or seek or accept any remuneration for product or promotion. We do not Spam anyone. To be added to the mailing list, you must request it. We do not send anything about our company or personal e-mail or jokes to the leasing news list. We do not share our mailing list with anyone. We try not to send more than one report a day, if at that, unless an "alert." We follow Internet Netiquette at all times. Our sole purpose is to provide communication to improve our profession. We reserve the right to deny sending the newsletter when requested. We reserve the right to edit or delete an opinion that is not in good taste or is outright derogatory. Leasingnews.org -----------------------------------------------------
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