As anticipated, Egypt made its first foray into the securitization market last week with a private placement managed by WestLandesbank.

Because of the nature of the deal, little information was disclosed, though sources indicated that the mt100 was fashioned similarly to the credit card merchant voucher deals that have come out of neighbouring Turkey in past years. Bank Misr is the originator behind Egypt's first deal, in line with expectations that banks and finance companies would initiate the market.

"It certainly opens up the possibility that we will see more deals, maybe even on the public side this year, but the additional deals won't necessarily be credit card deals," one source said. And because Egypt is similar to the Turkish market, analysts say, that potential asset classes down the line would be akin to those already tested in Turkey, such as export receivables, worker remittances and trade receivables.

Much like the Turkish economy, Egypt over recent years has grown its tourist industry. Also like Turkey, the industry was hurt by the events of Sept. 11, which reduced travel of visitors to the country. The industry, though, has been recovering and is expected to maintain its current pace through 2003, said market sources.

Along with the asset classes that are familiar to the Turkish securitization market, Egypt may also see some mortgage-backed deals. According to market analysts, the country's real estate finance law contains a clause that allows banks and mortgage lenders to assign their interest in a mortgage and to issue trade securities. The assignee of the mortgage, in the form of an SPV, would be responsible for the interest and equity servicing of the securities that it holds while the originator is entitled to perform the servicing.

Meanwhile, Lebanon is gearing up for substantial action. It's counted as one of the first countries within that region to emerge with a real estate transaction. Earlier this year BEMO securitization managed Indigo 1, a $6 million ABS for Solidere, the real estate company in charge of rebuilding Beirut central district. The Lebanese market remains very real estate-oriented. The sector is expected to be the main driver of future securitizations going forward. Currently BEMO securitization said it was in the process of issuing a $100 million CMBS that will be managed in conjunction with an international bank.

"We are in the running for several CMBS transactions because of the recent boom in retail businesses - these businesses have huge financing needs that local banks cannot accommodate," said one market source. "Their long-term needs make them suitable for securitization."

While there has been one other real estate deal completed within the region, the structure was dependent on a UK-based SPV. Lebanese securitization legislation allows for the use of local vehicles. "It can be an alternative for smaller vehicles, ideal as a middle market alternative for corporate funding," the source said.

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