one significant evolution of the leasing industry involved the collateralization of lease obligations in sale leaseback transactions. for example, a city would sell an asset to a bank. the bank would require lease payments and give the city an option to repurchase the asset. the lease obligations were low enough (due to the depreciation deductions the banks were now claiming) that the city could pay for the lease obligations and fund the repurchase of the asset by depositing most but not all of the sale proceeds in an interest-bearing account. this resulted in the city having pre-funded all of its lease obligations as well as its option to repurchase the asset from the bank for less than the amount received in the initial sale of the asset, in which case the city would be left with additional cash after having pre-funded all of its lease obligations.