easy · Asset-Backed Securities
In an equipment lease ABS, a 'finance lease' pool differs from an 'operating lease' pool primarily because bondholders in an operating lease structure face which additional risk?
- Residual value risk of the equipment at the end of the lease term.
- Interest rate basis risk between lease rate and bond coupon.
- Credit default risk of the small-business equipment lessees.
- Prepayment risk arising from early lease termination penalty clauses.
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