The estimation of future values and lease rates is important for an investor's assessment of a transaction's potential profitability and their portfolio's overall risk/return profile.
     
 
   
   
   
   
   
 
Such valuations are used by financial institutions to price asset-backed debt or determine the amount of credit that should be extended, to determine the amount of any necessary provisions to be made against future losses, and to set the proper residual value in a lease transaction.

The fvDynamics system has been developed by IAA to provide methods which reflect known market realities in the forecasting process, and to give lenders and investors an analytically robust alternative, based on probability and simulation.  The system is basically a virtual model of the future commercial aircraft market.

In addition, the system has been designed with a view toward helping financial institutions move forward with the process of implementing the Basel II risk assessment and capital adequacy changes, especially the LGD (loss given default) analysis.

To quote from the Bank and International Settlement website: "The Basel II Framework is intended to promote a more forward-looking approach to capital supervision, one that encourages banks to identify the risks they may face, today and in the future, and to develop or improve their ability to manage those risks. As a result, it is intended to be more flexible and better able to evolve with advances in markets and risk management practices."


fvDynamics

---   Future Value Forecasts over 20 years for commercial
       aircraft and corporate jets, including the related probability
       distributions for each annual forecast.

---   Lease Rate Forecasts over 10 years.

---   Scenario-based "what-if" analysis.

---   Microsoft Excel-based output.

---   Simulation software written in C++.
 

International Aviation Advisors, Inc.
Mr. William Loh, Managing Director

Telephone:  (407) 542-3286
Mobile:  (407) 234-6620
E-Mail:  info@intlaviation.com

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