GOL Economics

Lessees are attracted the GOL market due to high purchase prices paid by investors, favorable lease rates and investor diversification. The transactions on commercial equipment have lease terms of 7 – 12 years, often with lease financing economics that are often more attractive than lessees can achieve in other markets. KG investors are often willing to provide favorable lessee terms such as ½ time return conditions, minimal supplemental security (such as security deposits or maintenance reserves). The transactions are USD denominated, and the investors assume all the tax risk.

GOL investors are predominantly retail investors seeking tax enhanced transactions; they have moderate return requirements and favorable residual assumptions. During the lease term, the German equity investor enjoys the tax benefits and limited lease free cash. Upon lease expiry, the KG fund can sell the asset unless the lessee has chosen lease renewal and/or purchase options.

Need to know more? Contact me!