Tuesday, November 3, 2009

First Asset Backed Securitization in Lebanon

Not strictly the GCC, but this is my blog and I have strong affection for Lebanon.

BEMO Securitization SAL announced the closing of Rymco Drive 1 for Rasamny Younis Motor Company ("RYMCO"),  Lebanon's authorized GMC, Nissan and Infiniti dealer.

This deal is a first for two reasons:
  • It's the first auto receivable asset backed security ("ABS") in the country.  
  • And the first term securitization under Law 705 of 2005.

The total transaction is for US$13.1 million, divided into two tranches:
  • A senior tranche, Tranche A, at 77.5% of the transaction - roughly $10.5 million - with an average life of 3.7 years.
  • A subordinated tranche, Tranche B, at 22.5% - roughly US$3.0 million-  to be retained by RYMCO which provides an effective first loss credit enhancement for Tranche A holders.
    During the coming three year period, additional auto receivables may be incorporated into the structure resulting in US$40 million in aggregate funding for RYMCO.

    The deal also includes some other protective features:  a funded cash reserve and an "excess" interest capture.

    Congrats to BESC for a landmark deal.

    And, as always, a pleasure to see the distinguished banking name, Obegi, in the press!

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