JAPANESE OPERATING LEASE

A Japanese Operating Lease (JOL) is an operating lease funded by an equity investment from a Japanese entity and non-recourse senior debt provided on-shore in Japan. This structure is used in the aviation industry to provide airlines with 100% financing of aircraft at attractive rates and over long terms. The JOL is appealing to airlines as it offers competitive lease rates and off balance sheet financing. This is achievable because the owner of the aircraft (i.e., the Japanese equity investor) is entitled to claim depreciation tax benefits in Japan. In order to receive the tax benefits associated with owning the aircraft, the Japanese equity investor must accept residual value exposure as well as demonstrate knowledge and expertise of leasing... A Japanese Operating lease, or JOL, is a Japanese tax lease used to finance 100% of an aircraft purchase using a combination of off-shore, non-recourse senior debt and Japanese equity. Airlines benefit from competitive lease rates and off-..