For German tax reasons, the non-recourse sale of lease
receivables to banks has been the main source of financing for
German leasing companies for the past few decades. However, German
banks have become more and more reluctant to purchase lease
receivables. This is, at least partially, due to a lack of
attractive refinancing.
A new structure, pioneered by DZ Bank in the €390 million ($468
million) LEAGUE 2004-1 deal, allows banks to obtain attractive
refinancing by accessing the capital markets while at the same time
keeping the German trade tax neutrality available for the
refinancing of banks.
In a previous transaction, Gelt 2002-1, DZ Bank refinanced
itself through the issuance of notes worth €170 million that were
credit linked to a portfolio of lease receivables purchased from VR
Leasing and were (as is common for synthetic transactions) backed
by collateral notes in the form of Pfandbrief-like DZ Briefe.
In contrast,...