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Capital Markets

Lebanon: Securitization makes a comeback in Lebanon

First deal since 2007; Car distributor reopens market

total financing to Rymco

Lebanon’s first securitization issuance since 2007 was marketed in October, and another is being prepared. The deal takes advantage of legal provisions passed in 2005 allowing for more true-sale securitizations. The development of securitization in Lebanon had been delayed by the global credit crunch. BSEC, the structured finance arm of Beirut-based Banque Bemo, closed the October $13.14 million revolving automobile-loan securitization for Rasamny Younis Motor Company (Rymco) – the exclusive distributor in Lebanon of Nissan, Infiniti and GMC cars. BSEC is now arranging a similar securitization for another Lebanon automobile franchise operator Bassoul-Heneiné, amounting to about $15 million.

Rymco sold a portfolio composed of several hundred automobile loans to a special purpose vehicle. The vehicle issued two classes of note, one with an expected average life of 3.7 years and a yearly fixed coupon of 7.5%, and another subordinated to the first class and retained by Rymco. The holder of the first class of note will benefit from loss protection provided by the subordination of the second class.

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