AUB Leasing

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PRODUCTS AND SERVICES:

Operating Lease

DEFINITION: A cancelable agreement whereby AULFC, through its subsidiary, Asia Fleet Management Services, Inc. (AFMSI) conveys to the lessee (borrower) in return for a series of rentals the right to the use of an equipment or motor vehicle

Product Features

1. Ownership of the equipment or motor vehicle is retained by AFSMI
2. The lessee has no option to buy the equipment or motor vehicle and should surrender the equipment back to AFSMI at the end of the lease term
3. The lessee has the right to use only. The risks and benefits incidental to ownership are not transferred to lessee who has to bear the maintenance, insurance, registration, taxes and all other expenses to use/ operate the equipment or motor vehicle leased
4. Payments are considered rentals and recognized as operating expense in the P&L of the lessee,
5. AFSMI carries the equipment or motor vehicle as an Asset in the Balance Sheet and recognizes the depreciation expense in its P&L.

General Guidelines

Eligibility: Available to borrowers (corporations, partnerships, single proprietorships) who are acceptable under AULFC's existing credit criteria
Purpose: To provide a lessee equipment or motor vehicle under an off-book lease transaction and allow him to charge lease payments as rental expense
Amount: An amount equal to the present value of the lease payments which should be less than 90% of the equipment's or motor vehicle's fair market value
Minimum Guaranty Deposit: 10% of Cost of Equipment or motor vehicle
Maximum Term: Should be less than 75% of the estimated economic life of the equipment or motor vehicle (usually 42 months)
Monthly Rental: Determined depending on type of leased asset and term
Repayment: Payable monthly in advance or in arrears
Collateral: AULFC Ownership over the equipment leased

Financial Lease

DEFINITION: A non-cancelable agreement whereby AULFC conveys to the lessee (borrower) in return for a series of payments the right to use an equipment or motor vehicle and transfers to the lessee all the risks and benefits incidental to the ownership of the equipment or motor vehicle

Product Features

1. Ownership of the equipment or motor vehicle remains in the name of AULFC and transferred to lessee at the end of the lease term
2. The lessee has the option to buy the equipment or motor vehicle at an amount equal the agreed Residual Value to surrender the equipment back to AULFC the end of the lease term
3. The risks and benefits incidental to ownership are transferred to lessee who pays for maintenance, insurance, registration, taxes and all other expenses to use/ operate the equipment or motor vehicle leased
4. The equipment or motor vehicle leased is considered an asset and the lease payments a liability in the Balance Sheet of the lessee like a loan
5. Lessee is considered to be the owner of the equipment and therefore claims depreciation expense and interest expense

General Guidelines

Eligibility: Available to borrowers (corporations, partnerships, single proprietorships) who are acceptable under AULFCss existing credit criteria
Purpose:

1. To finance the acquisition of equipment and motor vehicles via a straight lease transaction
2. To re-finance previously acquired equipment or motor vehicles via a sale-leaseback transaction

Minimum Amount: Php 1,000,000.00
Minimum Guaranty Deposit: 10% of Cost of Equipment
Maximum Term: 60 months