A structured leasing is a new and highly flexible transaction that develops synergies between funding policy, risk management of the underlying assets, and tax benefits. It is used in particular transactions involving complex and large-scale assets, such as airplanes, ships, industrial plant and equipment, and large real estate projects. As in other tax-based techniques, the implementation of a structured leasing transaction, either a leveraged lease or a synthetic lease, is more significant when the value of the asset is large and allows for a potentially greater tax benefits' appropriation. Structured leasing creates value by increasing liquidity and funding, reducing the funding costs, allowing sponsors to attain greater leverage and to increase tax shields, improving lessees' risk management, and allowing lessees to maintain financial flexibility, by improving or maintaining financial ratios. Although all of the above-mentioned economic advantages, structured leasing also has problems. The most commonly referred problems of structured leases are complexity, offbalance sheet treatment, higher transaction costs, and wealth expropriation. Besides describing the economic motivations and problems of structured leasing, this paper provides details on the characteristics of structured leasing activity and reviews the most influential papers, summarizes their results, and associates them with the existing empirical evidence.
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