Many different definitions exist for what constitutes an ‘esoteric’ or ‘off-the-run’ asset-backed transaction. Broadly, various research includes such disparate assets as equipment leases, drug royalty streams, catastrophe risk bonds, insurance premiums, tax liens and timeshare receivables.

Of particular note, however, are two operating type assets, shipping container leases and aircraft operating leases. Both have seen a relative resurgence of issuance over the last 18 months and share a number of key similarities:  highly cyclical industries, utilization and lease rate dynamics, and weak(er) lessee profiles/concentrations.

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