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Using Equipment Trust Certificates To Buy Commercial Aircrafts & Cargo Ships
Equipment trust certificates (ETCs) are a type of financial instrument that can be used to finance the purchase of capital-intensive machinery, cargo ships, and commercial aircrafts.
They are a form of securitization, which means that they are created by pooling assets together and selling them as securities to investors.
In this article, we will take a closer look at ETCs and how they can be used to finance the acquisition of large-scale equipment.
What are Equipment Trust Certificates?
An ETC is a type of bond that is issued by a trust, which is created specifically to finance the purchase of equipment.
The trust holds title to the equipment and uses the proceeds from the sale of the ETCs to purchase the equipment.
The trust then leases the equipment to the company that will use it, and the company makes payments to the trust to cover the cost of the equipment, as well as interest and other expenses.
The ETCs are sold to investors, who provide the capital for the purchase of the equipment.
The investors receive a stream of income from the payments made by the company that is using the equipment.
