Municipal and federal lessors, lenders and advisors attending the Association for Governmental Leasing and Finance (AGLF) Conference this year were upbeat about equipment finance, and the sector is experiencing rising business volumes though margins remain thin and rates compressed, according to Bob Neptune of The Alta Group consultancy. He reports that attendance was up at the group’s annual meeting by 25-30 percent.
Neptune said he learned that market uncertainty under America’s new federal administration will drive more municipal borrowers/issuers to the private placement market and that this sector’s financing specialists are not anticipating disruption from tax legislation this year. Therefore, they are not currently making adjustments for this.
In a presentation on the economy, Scott Colbert, executive vice president, chief economist and director of fixed income for The Commerce Trust Company of Kansas City, MO, said he doesn’t anticipate that a reduction in tax rates will have drastic effects on tax-exempt markets. He noted also that the current period of economic growth is approaching the longest such period in recent economic history.
“Mr. Colbert gave one of the best economic presentations I’ve seen in several years. He did not suggest a pending end to the growth, but he does believe that we may soon be on untread ground in that regard and that a heightened awareness for signs of a downturn may be advisable,” Neptune says.
Susan Warshaw Ebner, a partner with Fortney & Scott, reported there are current efforts in Congress to improve how the federal government purchases and attracts new entrants into government procurement. Because procurement drives both acquisition and financing in most cases, these efforts could have a significant effect on how lenders access the federal financing market.
A session titled “The Robots Are Coming – The Impact of Automation,” which was led by Carlos Fuentes, vice president of strategy and architecture for the Federal Reserve Bank of New York, provided a mountain of statistics about the onset of computerization and digital conversion around the world.
“Perhaps this was most graphically represented by the estimate that 69 percent of all jobs in India will be replaced by automation within 10 years,” says Neptune.
“On a global basis, this would suggest that this particular segment of the financing business should remain robust for the foreseeable future,” he adds.
The AGLF meeting was May 3-5 in Denver, CO, with the following organizations sponsoring the event:
Capital One Public Funding, LLC
U.S. Bank Government Leasing and Finance
Key Government Finance
All American Investment Group, LLC
De Lage Landen Public Finance LLC
Kansas State Bank
Texas Capital Bank, N.A.
TMI Trust Company
Huntington National Bank
Pinnacle Public Finance
A number of prominent law firms also sponsored.
Gilmore & Bell, P.C.
Chapman and Cutler, LLP
Davis Wright Tremaine, LLP
Dinsmore and Shohl, LLP
Blog Source: Bob Neptune
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