National Press Release

Nassau Asset Management's Index Shows Medical Repos Also Up, Construction Equipment Repos Down From Previous Year

WESTBURY, N.Y., Jan. 13 /PRNewswire/ -- Repossessions and liquidations of machine tools rose by more than 150 percent in 2008 while construction equipment repossessions also increased as compared to 2007, according to Nassau Asset Management's NasTrac Quarterly Index (NQI). The figures, culled from the company's activity reports for both repossessions and orderly liquidations, show the slumping economy continues to have widespread effects on the construction, manufacturing and transportation industries.

Machine tool repossessions have undergone a steady and continuous increase since the third quarter of 2007, according to Nassau's records. Truck repossessions processed by Nassau declined in 2008 from a high point in 2007, but the 2008 totals represented a 50 percent increase from 2006 figures.

"In our experience a spike in the machine tool sector reflects the true economic condition," said Ed Castagna, president of Nassau Asset Management. "It is clear that manufacturing demand is low, bringing more repossessed and off lease machine tools to the market."

"While it's impossible to predict the future, it does appear this trend will continue in 2009," Castagna added. "This is especially true if American automakers continue their struggles, with or without government assistance. It will also be important to see if U.S. exports decrease because of a rising dollar and if the construction market receives a boost from an injection of government-funded activity focused on improving the country's infrastructure."

Castagna concluded, "The credit market remains sluggish, and lenders are receiving mixed signals. The Federal Reserve weekly reports show an increase in commercial and industrial loans, but those loans are being used by large companies to meet their financing needs or to have cash on hand for the future. They are not being used to generate new business activity in the leasing sector and elsewhere."

"Therefore, it's not clear that the credit market has yet to begin supplying the relief needed by potential borrowers in the industrial markets. As a result, Nassau has seen a slight drop in a still strong buying climate among our customers who are struggling to maintain normal credit lines."

Trucking Repossessions and Liquidations

Repossession figures for trucks and tractor trailers declined by 25 percent in 2008 as compared to the previous year. The initial glut of trucks in the marketplace following the change in engines in 2006-2007 has now been absorbed. However the slow economy means there is still a high level of inventory which may yet increase due to difficult credit slowing down the entire food chain.

Other Repo Trends

Nassau's latest NQI compares the company's internal repossession and orderly liquidation activity in 2008 with 2007. In addition to reporting on truck volume, the latest NQI revealed the following trends:

Construction Repos Increased Slightly -- Construction equipment repossessions in 2008 rose by 11 percent from the totals for 2007. This sector has been struggling for some time now and a recent report by the federal government showed new home construction has now dropped to the lowest rate since 1959, the first year the government tracked this activity.

Machine Tool Repos Increased Dramatically -- Repossessions of machine tool equipment increased by more than 150 percent in 2008, as compared to 2007. This activity reflects ongoing trends in the manufacturing sector. The last such increase in machine tool repos came during the last recession after 9/11.

Medical Equipment Repos Increased From Q2 08 -- Data in the NQI showed repossessions of medical equipment in 2008 increased by approximately 50 percent over 2007.

NQI Graphics

For graphics outlining the findings of the NQI go to http://www.nasset.com/news/images/NQI_2007_vs_2008.jpg.

About NQI

NQI reports on Nassau's internal repossession and orderly liquidation activity in a given quarter compared to the same quarter the previous year or to previous quarters in the same year. Readers should keep in mind that results must be viewed over several quarters to establish trends. Finance companies and industry analysts can also contract with Nassau to dig deeper into the numbers, determining the root causes for trends and researching specific equipment types. Companies can use their private reports created by Nassau to help mitigate risk in portfolios and/or provide useful economic indicators to their own clients.

ABOUT NASSAU

Nassau Asset Management of Westbury, NY, has been providing full-service asset management, including asset recovery, collections, remarketing, plant liquidations, and appraisals for more than 25 years to the equipment finance industry. For more information, please visit www.nasset.com or call 1-800-4-NASSAU.

SOURCE Nassau Asset Management