LAW OFFICES OF
DERENTHAL & DANNHAUSER LLP
ONE POST STREET, SUITE 575
SAN FRANCISCO, CALIFORNIA 94104
(415) 981-4844
FACSIMILE: (415) 981-4840
June 3, 2008
BY EDGAR AND OVERNIGHT DELIVERY
Mr. Rufus Decker
Accounting Branch Chief
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
Re: ATEL Capital Equipment Fund IX, LLC (the "Company)
Form 10-K for the fiscal year ended December 31, 2007
Form 10-Q for the period ended March 31, 2008
SEC File No. 0-50210
Dear Mr. Decker:
This letter is in response to your letter dated May 28, 2008, to Mr.
Paritosh Choksi, Chief Financial Officer of the above-referenced Company,
regarding the referenced reports.
The Company's supplemental responses to the comments in your letter are
set forth below, with captions and numbered responses keyed to the captions and
numbered comments in your letter.
FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
General
1. The supplemental responses include the Company's proposed revisions to be
made to future filings. Subject to the Staff's concurrence with the
adequacy of the proposed revisions in response to its comments, all such
revisions will be included in future filings as appropriate.
Capital Resources and Liquidity
2. The full amount remaining available under the joint acquisition and
warehouse facility is potentially available to the Company. However, as
amounts are drawn on the facility by each of the Company and the affiliates
who are borrowers under the facility, the amount available to all is
Mr. Rufus Decker
June 3, 2008
Page 2
reduced. As the warehousing facility is a short term bridge financing
facility, any amounts borrowed under the warehousing facility, and then
repaid by the affiliated borrowers (including the Company) upon allocation
of an acquisition to a specific purchaser, become available under the
warehouse facility for further short term borrowing.
As noted on pages 12 and 35, the receivables funding program was terminated
with respect to new borrowing by the Company in January 2006. The
receivables funding program was therefore incorrectly presented as a source
of liquidity in Item 7 of the 10-K. The receivables funding program was
appropriately presented in the "Capital Resources and Liquidity" discussion
in Item 2 of Part I of the subsequent 10-Q, and will be correctly presented
in all future reports. The primary sources of liquidity for the Company in
future periods will be the Company's lease and loan financing revenues, and
any debt financing for future acquisitions which may be available through
the joint warehouse and acquisition facility and/or through non recourse
financing sought from other third party lenders.
Note 2. Summary of Significant Accounting Policies
Initial Direct Costs
3. While internal costs are parenthetically described as "(e.g., labor and
overhead)," the reported IDC consists solely of employee-related costs
incurred in connection with the successful origination of leases and loans
in the Company's portfolio. In order to make this clear, the Company
proposes in future reports to revise the sentence in question to read as
follows:
"IDC includes both internal costs (e.g., the costs of employees' activities
in connection with successful lease and loan originations) and external
broker fees incurred with such originations."
Those costs that have been treated as IDC are determined in the manner
described in the memorandum prepared by the Company's Manager entitled
"Revised procedures for identifying, calculating, allocating and amortizing
the Initial Direct Costs ("IDC")." This memorandum was provided to the
Staff in connection with a prior review of the Company's 2004 Form 10-K,
along with my letter dated April 3, 2006. The revised procedures were
designed, among other things, to assure that IDC were determined in
accordance with SFAS 13 paragraph 5(m) and SFAS 91.
Mr. Rufus Decker
June 3, 2008
Page 3
Exhibit 31
4. The word "annual" will be removed from paragraphs 2 and 3 of the Exhibit 31
certifications in all future reports.
FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 2008
General
5. See the responses to comments 2, 3 and 4 above. As noted, the responsive
changes will be included in all future periodic reports, including interim
reports.
Note 12. Fair Value of Financial Instruments, page 22
6. The balance sheet line item caption in future reports will be corrected by
revising it to read "Investment in Securities" with the qualifier "at cost"
removed. This will restore consistency between the financial statements and
the footnote disclosures under footnote 2, "Summary of significant
accounting policies - Investment in Securities," and footnote 12, "Fair
value of financial instruments," as they reflect both the "cost" and "fair
value" concepts defined therein. The footnote disclosure will continue to
state that purchased securities are reported either at cost or fair value,
as defined, and warrants are reported at fair value.
Attached is a letter from the Company with the requested acknowledgments
regarding the Staff's comments and its responsibility.
Please contact the undersigned with any further comments or questions
concerning the Company's reports.
Very truly yours,
/s/ PAUL J. DERENTHAL
Paul J. Derenthal
cc: Mr. Paritosh Choksi
Mr. Samuel Schussler
Mr. Tullus Miller
Ms. Nudrat Salik