BEMO in $13.1 million auto loan securitisation.

Byline: [e-mail] (Staff Writer)

Bemo Securitisation has successfully closed the Rymco Drive 1, RYMCO'S first revolving auto ABS. Bemo Securitisation SAL successfully closed the $13.1 million auto loan securitisation for Rasamny Younis Motor Company SAL (RYMCO), the exclusive distributor in Lebanon of Nissan, Infiniti and GMC brands and the franchise operator of the Infiniti brand in London, UK.

The deal is a securitisation of a diversified portfolio of auto loans granted by RYMCO to its clients, and is the first term securitisation established under Lebanese Asset Securitisation Law 705/2005.

"The transaction's success reinforces the view that the local capital markets are in need of alternative and innovative investment opportunities especially due to the increasing liquidity of the local banks," explained Riad Obegi, Chairman of BSEC.

On closing date, RYMCO sold to the fund, on a true sale basis, a portfolio composed of hundreds of auto loans granted to several obligors, pursuant to Banque du Liban approval. The fund issued two classes of Notes, Class A, with an expected weighted average life of 3.7 years and a yearly fixed coupon of 7.5 per cent, and Class B which is subordinated to Class A and retained by RYMCO.

The Class A note-holders will benefit from the following credit enhancement features: (i) first loss protection of 22.5 per cent provided by the subordination of the Class B note, (ii) a cash reserve of 3.7 per cent fully funded on closing, as well as (iii) an excess spread trapping mechanism.

The structure provides for a three-year replenishing period during which the fund may purchase additional auto loans subject to certain preset criteria, this will result in a total financing to RYMCO that could go up to $40 million.

"This transaction provided RYMCO with an alternative source of funding and it will allow it to enhance its financial ratios, specifically its debt to equity ratio," BSEC said.

The deal was structured, arranged and co-lead managed by BSEC. FFA Private Bank and First National Bank were co-lead managers. The issuance was underwritten by FFA Private Bank, First National Bank and Banque BEMO. The legal counsel of BSEC on the deal was Dr. Nasri Antoine Diab.

2009 CPI Financial. All rights reserved.

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