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  1. Analysis
November 24, 2011

Basement Talk

It was the year William Jefferson Bill Clinton became the 42nd president of the United States; the World Trade Center in New York was hit by a car bomb planted by Islamist extremists; the US and Russia agreed to halve their stockpile of nuclear warheads; the crew of the space shuttle Endeavour repaired the Hubble telescope during a marathon spacewalk; and Marseille won the first UEFA Champions League Final.

By Grant Collinson

That was the year that was

Can you remember 1993?

It was the year William Jefferson ‘Bill’ Clinton became the 42nd president of the United States; the World Trade Center in New York was hit by a car bomb planted by Islamist extremists; the US and Russia agreed to halve their stockpile of nuclear warheads; the crew of the space shuttle Endeavour repaired the Hubble telescope during a marathon spacewalk; and Marseille won the first UEFA Champions League Final.

But all that hardly matters, because October 1993 also saw Issue 1, Volume 1 of Leasing Life hit the news-stands.

The editorial team at Leasing Life HQ recently undertook the unenviable task of cleaning our desks. Amid the ancient coffee stains, now gelatinous and possibly sentient, the scribbled notes reminding us of important tasks long ago forgotten and deadlines well passed, we came across the original issue – the prima editio, alpha of the asset finance journal universe.

This, we thought, was worth celebrating with a look at the big leasing stories of that innocent time before the euro, before the War on Terror and Facebook when shell suits were cool and mobile phones were colossal.

Here are some snippets of leasing history:

 

Accounting changes

Image of Leasing Life issue 1Last year the Austrian Institute of Certified Public Accountants issued a draft on accounting standards for leases which is now in open debate. The main areas covered by the draft are: the time recognition of profit and loss; bad-debt provisions; initial costs; and valuation principles for leased assets.

Austria’s new banking law incorporates (in accordance with EEA-treaty) the EC directive No. 86/635/EEC. The directive relates to financial statements and consolidated financial statements of financial institutions and banks.

The law, which in general will come into force on 1 January 1994, applies to lessors that are members of banks and financial groups as far as consolidated financial statements are concerned.

Company reports: Woodchester Investments

The devaluation of the Irish punt, caused by last year’s ERM debacle, hit Woodchester to the tune of a 6.2% fall to IR£6.4m pre-tax for the first six months to 30 June. Lending is on fixed rates and the policy is to hedge 90% of the portfolio.

However, this was not practicable during the currency turbulence of late 1992 and early 1993. Consequently, as short-term rates soared, Woodchester had to carry the extra costs. The results include input from Credit Lyonnais’s leasing arm CLLE (in which Woodchester holds 30%) for the first time. CLLE upped profits to IR£2.8m. Group earnings fell by 15% to 6.37p, but the interim dividend was boosted by 15% to 12.08p.

BR decision this month?

As Leasing Life went to press, the British Railways Board was preparing to pass its recommendations to government on which of the two £150m rolling-stock leasing proposals should go forward. The bids stem from the government’s autumn 1992 decision to allow BR to place orders for new lease-financed trains in the face of increasing pressure from train builders.

 

Another highlights include The Fritz Peter Story, a profile of Fritz Peter – professional footballer with Grasshoppers Club Zurich, Swiss bobsleigh champion, respected academic and founder of Leaseurope and a look ahead to that same organisation’s annual working meeting in Marrakech.

Truly those were halcyon days.

Leasing Life 1 opened with the following statement:

 

“This month’s Transaction Chronicle suggests that there really is still life in the leasing industry. Leasing Life has been launched to reflect that life and to be a forum for European leasing’s interests, hopes and concerns. It is your publication, please use it to express your views.

“My sincerest thanks to all our contributors and advertisers without whom Leasing Life would not have been born. Future issues may be slimmer but the editorial philosophy will remain constant.

“My very best regards, Vic Lock.”

 

The issues have maintained a similar girth these 18 years and while the production design is, we hope, a little more savvy and the writing, dare we say, a little more sophisticated, the ambition of founding editor Vic Lock for Leasing Life to be a forum for European leasing is still one we strive towards and we hope our esteemed readers would agree we are doing okay in that regard.

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