Bemo Securitization SAL (BSEC) said its closed Rymco Drive 1, Rasamny Younis Motor Co.’s (RYMCO) first revolving auto ABS, and the first term securitization established under Lebanese asset securitization law 705/2005.
The transaction is a $13.144 million auto loan securitization with a revolving feature that can ensure a financing up to $40 Million to RYMCO, the exclusive distributor in Lebanon of Nissan, Infiniti and GMC brands and the franchise operator of the Infiniti brand in London, UK.
“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,” said 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%, and Class B which is subordinated to Class A and retained by RYMCO.
The Class A noteholders will benefit from the following credit enhancement features: (i) first loss protection of 22.5% provided by the subordination of the Class B note, (ii) a cash reserve of 3.7% 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.