Effective lessee strategies in today's marketplace - 2002 Guide to Equipment Leasing - railroad equipment

Railway Age,  June, 2002  by Tony Kruglinski

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And if you have a lessor who is not willing to open negotiations in advance of lease end or renewal--and you have only a year or two until then--advertisement in the marketplace that you will be willing to negotiate a forward commitment to take replacement equipment may bring him or her around.

* Rule #6: Suggest ending their pain. This may be the most obvious of strategies, but with interest rates the lowest (or almost the lowest) they have been in years, perhaps it's time for end-users of railcars or locomotives to suggest that the acquisition by lessees of the equipment they lease (or other equipment in the lessor's portfolio) might be a best-case solution to the lessor's problems. For instance--assuming the equipment in question is not recently manufactured and carried on the books of the lessor at more than its worth--what about offering to purchase the cars or locos you are leasing today for cash? We'd agree that that is probably the last thing the lessor is considering, but you never know what earnings or fleet management pressures that same lessor is undergoing, and knowing that there is an opportunistic market for some of the fleet might just be the ticket in the instant situation. You never know.

Final advice? Of one thing we are sure: Doing nothing in this buyer's marketplace is probably wrong.

Tony Kruglinski welcomes comments and controversy via email at tkruglinski@railfin.com.

COPYRIGHT 2002 Simmons-Boardman Publishing Corporation
COPYRIGHT 2002 Gale Group