Pros and Cons of creating an EquipCo for all capital- and operating leases in asset-heavy company?

Dear reader, we recently had a project where, after a PE acquisition of a asset-heavy company, all capital- and operating lease contracts where aggregated in a new EquipCo separate from the OpCo. Afterwards, the EquipCo would rent out the assets to the OpCo (at a margin). Did anyone have a similar transaction and can list some of the major pros and cons experienced?

 

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