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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, and is designed
with a view toward helping financial institutions 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 Market Value Forecasts over 20 years for commercial
aircraft, including the related
probability
distributions.
--- Lease
Rate Forecasts over 10 years.
--- Scenario-based
"what-if" logical parameters.
--- Simulation is based on a sophisticated Expert
System, which quantifies
our experience of the
dynamics of the aircraft market.
Lessor Investment Return Model
--- The entire operating lease term analyzed in
detail, for an unlimited
number of aircraft.
--- PDP
payments included if necessary.
--- Variables include all parameters important
to a lessor's business, in terms of
their affect on the balance
sheet, cash flow and IRR.
--- Custom software level logic done in MS Excel.
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