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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 76.93

+1.1%

Nov 28 12:59 PM EST

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To: RetiredNow who wrote (59420)	5/9/2002 1:50:11 PM
From: willcousa	Read Replies (1) of 77400

I think your description of a "capital lease" is correct but I think we are talking about a "leverage lease" when we speak of a "synthetic lease". In a "synthetic lease" the lessee has a fair market value purchase option at the end so that the lessee is not the tax owner of the lease as he would be in a capital lease. The reason for the synthetic structure is to transfer the tax benefits of the leased assets to the lessor. I could be wrong on this as the term "synthetic lease" came along after I retired.

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