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Sentry Financial Corporation

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Sentry Financial Corporation

  1. 1. Sentry Financial<br />2011<br />Working together, prospering together<br />Seasoned, Systematic, Successful<br />Telecom equipment financing specialists<br />
  2. 2. Sentry at a Glance<br />Seasoned, Systematic, Successful<br />Equipment financing specialists<br />
  3. 3. Our Approach<br />Seasoned, Systematic, Successful<br />Equipment financing specialists<br />
  4. 4. U.S. Equipment Leasing & Financing (2002 – 2009)<br />$ Billions<br />Sources: US Bureau of Economic Analysis, Equipment Leasing and Financing Association<br />Seasoned, Systematic, Successful<br />Equipment financing specialists<br />
  5. 5. U.S. Equipment Leasing & Financing (2009)<br />$14.26 T<br />$916 B<br />$518 B<br />$264 B<br />56.5%<br />51.0%<br />6.4%<br />(1.85% of GDP)<br />Sources: US Bureau of Economic Analysis, Equipment Leasing and Financing Association<br />Telecom equipment financing specialists<br />Seasoned, Systematic, Successful<br />
  6. 6. Who Leases?<br />Corporations<br />85% of all U.S. companies lease equipment<br />$518 Billion in 2009 volume<br />Consumers<br />25% of new cars are leased<br />$80 Billion in 2009 lease volume<br />Government<br />US Government:<br />Leases $10 Billion to $20 Billion of vehicles and equipment annually<br />Seasoned, Systematic, Successful<br />Equipment financing specialists<br />
  7. 7. Why Do Companies Lease?<br /><ul><li>Preserve cash and credit lines
  8. 8. Augment funding capabilities
  9. 9. Facilitate offbalance sheet source of funds
  10. 10. Avoid equipment obsolescence
  11. 11. Avoid capital budget constraints</li></ul>Seasoned, Systematic, Successful<br />Equipment financing specialists<br />
  12. 12. Targeted Equipment Financing Transactions<br />Size:$5M to $30M per transaction<br />Structure:True lease*<br />Term:3 to 5 years<br />Credit: B- to BBB+**<br />Equipment:Essential purpose hardware & software<br />Value add:1) Understand the customer’s needs, objectives, and strategy<br /> 2) Structure transactions that do not meet bank lending parameters<br /> 3) Invest our own capital<br /> 4) Provide full service leasing infrastructure (origination, credit, documentation, servicing)<br />* A true lease occurs when there is a transfer of the right to possession and use of equipment for a term in return for payments and/or other consideration. True leases may be structured as operating leases or capital leases. In bankruptcy, a true lease has certain benefits and protections vis-à-vis a loan.<br />** S&P, Moody’s, Fitch or Sentry equivalent rating; Sentry has a full credit and underwriting department that can rate any private or public company.<br />Seasoned, Systematic, Successful<br />Equipment financing specialists<br />
  13. 13. Targeted Vendor Financing Engagements<br />Vendors:Manufacturers (U.S. or foreign) of capital equipment and software<br />Structure:Lease line facility<br /> The vendor provides targeted customers with a lease line facility that can be drawn down over a term typically from 6 to 12 months<br />Size:$10M to $100M per customer<br />Takedowns: Each takedown (funding) is structured as a true lease*<br /> Each lease has a term from 3 to 5 years based on the equipment and credit of the lessee<br />Equipment: Hardware, software and services (total solution)<br />Value add:Manufacturers are able to:<br /> 1) offer “one-stop shopping”<br /> 2) increase total solution sales<br /> 3) strengthen customer relationships<br />Seasoned, Systematic, Successful<br />Equipment financing specialists<br />
  14. 14. Appendix - Leasing 101<br />Seasoned, Systematic, Successful<br />Equipment financing specialists<br />
  15. 15. What is an Equipment Lease?<br />Legal Definition:<br />Transfer of the right to possession and use of equipment for a term in return for payments and/or other consideration<br />Practical Definition:<br />An alternative to a loan to acquire [the use of] equipment<br />Accounting Definition:<br />FASB Statement No. 13<br />Capital Lease<br />Operating Lease<br />Seasoned, Systematic, Successful<br />Equipment financing specialists<br />
  16. 16. How Does an Equipment Lease Work?<br />Lessee’s End of Term Options<br /><ul><li>FASB 13
  17. 17. Operating Lease</li></ul>Capital/Finance<br />Lease <br />(structured as a loan)<br />1st Amendment<br />Lease<br />Purchase Equipment at FMV<br />Purchase Equipment for $1.00<br />Purchase Equipment at Pre-agreed Amount<br />or<br />or<br />Extend lease<br />at Pre-agreed Amount<br />Extend Lease at FRV<br />or<br />Return Equipment to Lessor<br />Telecom equipment financing specialists<br />Seasoned, Systematic, Successful<br />
  18. 18. How Does an Equipment Lease Work?<br />Equipment Manufacturer<br />(Vendor)<br />2) Orders Equipment<br />6) Pays Purchase Price <br />3) Deliver and Install Equipment<br />7) Transfers title to Equipment<br />Customer<br />(Lessee) <br />SENTRY<br /> (Lessor)<br />1) Lease Documents Signed<br />8) Invoices for lease payments (plus applicable sales/use/property taxes) <br />4) Certificate of Acceptance Signed by Customer<br />5) Disburse Loan <br />Proceeds<br />11) Transfers sales/use/property taxes<br />Sentry Lockbox<br />Institutional<br />Investors<br />(Lenders)<br />9) Pays lease invoices<br />10) Wire transfers loan payment <br /> amounts<br />Telecom equipment financing specialists<br />Seasoned, Systematic, Successful<br />
  19. 19. How Does an Operating Lease Work?<br />Telecom equipment financing specialists<br />Seasoned, Systematic, Successful<br />
  20. 20. How Do Leases Compare to Bonds?<br />Telecom equipment financing specialists<br />Seasoned, Systematic, Successful<br />
  21. 21. John Bonnemort, VP<br />(801) 303-1137<br />jbonnemort@sentryfinancial.com<br />Jeff Brimhall, EVP<br />(801) 303-1103<br />jbrimhall@sentryfinancial.com<br />Working together, prospering together<br />Seasoned, Systematic, Successful<br />Telecom equipment financing specialists<br />

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