Guide to Analysing Companies

Laundering
See money laundering.
LBO
See leveraged buy-out.
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Lead manager
A bank which leads the organisation of a syndicated loan
or of a new issue and the underwriting of securities. The
lead manager does most of the hard work in the negotiations
with the borrower and guarantees to take up the largest part of
any issue that is left unsold. In return, it gets the biggest fee and
top billing on the tombstone. The lead manager also ranks at
the top of the league tables of issues underwritten by such
banks. Although it is rarely given as a reason for winning a par-
ticular mandate, investment banks like to be seen to be at or
near the top, especially for lucrative international deals in the
debt or equity markets.
Leasing 
The hiring of capital goods or equipment by manufacturing
companies in order to avoid the all-at-once cost of purchasing
them. A financial institution buys the capital goods, sets the
capital cost off against its taxable income and leases the goods
to the manufacturer. Much of the tax benefit to the leasing insti-
tution is passed on to the lessee in the form of lower charges.
Leasing is particularly attractive when:
 the lessee has used up all its available capital allowances
(because of its own heavy expenditure on capital risks);
 the lessee does not have the cash to make a capital
purchase;
 the lessee does not want to be burdened with the
responsibilities of ownership.
Lender of last resort
The ultimate responsibility of a central bank is to act as a
lender of last resort to a country’s financial system, typically to
provide banks under its charge with enough money to stop a
run on any particular one of them. All banks are illiquid, that is,