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LEASING FACILITIES

Leasing Facilities

1. Financial Leases

    Financial Lease is a credit facility where LBP Lease (lessor) acquires fixed     assets based on the requirements/needs of the client (lessee) which are     then leased by the client (Lessee) from LBP Lease (Lessor) through payment     of periodic lease amortization. The benefits and risks of ownership of the     assets are transferred to the lease.This facility allows enterprises to     acquire equipment, motor vehicle, lot and building and other equipment, to     expand, upgrade or modernize their operations. It also enables enterprises     to match financing terms with the earning potential of the capital asset,     preserve working capital and credit lines and address existing or current     budget limitation.

2. Operating Leases

    Operating Lease is a credit facility where the client (lessee) makes rental     payments to LBP Lease (lessor) for the use of an asset over a fixed period     (normally, more than a year). Under the facility, LBP Lease retains the     benefits and risk of ownership of the leased asset. At the end of the lease     term, the lessee may opt to renew the lease, purchase the asset at its fair     market value or return the asset to LBP Lease. Operating lease facility is for     clients who do not want to be burdened with acquisition and disposition     processes and will rather not have the risks and benefits of ownership on     the asset to be acquired. It can only be granted for selected asset types     that have relatively long economic life and well established secondary     markets.