medium · Asset-Backed Securities asset-nuances

In the event of a lessee default in an operating lease ABS, why is repossession typically faster than in a secured auto loan transaction?

  1. Equipment leases must include a recovery-speed clause mandated by federal regulators.
  2. The lessor (trust) already retains legal title to the equipment in a true lease structure.
  3. Commercial equipment lessees are entirely excluded from automatic bankruptcy stay protections.
  4. Federal maritime statutes permit lessors to use self-help repossession on any commercial equipment.

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