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ALCs may be established by banks, intermediary institutions, list-
ed real estate investment trusts, public corporations with an average
market value above TRY 1 billion and average market capitalization
over TRY 250 million, partnerships where the Treasury holds 51% and
more shareholding.
The board of directors of the ALC is liable for failure to collect the
proceeds obtained from the rights and assets as well as to make pay-
ment to lease certificate holders pro rata their share as per their lease
certificate.
The Communiqué regulates the issuance of lease certificates in a
broad manner, leaving space for interpretation and practice. As per the
Communiqué, real persons or legal entities execute a written agree-
ment, indicating their intention to pool their properties to establish the
originating institution. The originating institution transfers assets and
rights to the ALC for the issuance of ownership-based lease certifi-
cates, or to the companies incorporating the ALC that manage the
assets or rights on behalf of the ALC in the issuance of management
agreement-based lease certificates. The ALC serves as the special pur-
pose vehicle to which the assets or rights are transferred or leased.
The characteristics of each type of lease certificate are as follows:
• Ownership based lease certificates are issued to provide financ-
ing for the acquisition of the rights and assets by the ALC from
the originating institution for the purposes of leasing to the orig-
inator or third parties or management on behalf of the ALC.
• Lease certificates backed by management contracts are issued
so as to transfer the proceeds generated by managing the assets
or rights owned by the originating institution to the ALC.
• Lease certificates backed by trading are issued for proceeds
generated from the sale of assets and rights on deferred basis in
order to finance the acquisition of such asset or right by the
ALC.
• Lease certificates backed by a partnership are issued for pro-
viding financing to enable the ALC to be a shareholder of the
joint-venture.
CAPITAL MARKETS LAW
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