Lebanese securitizations are certain to explode onto the scene following the launch of the country's first transaction earlier this year by the Banque Europeanne pour le Moyen-Orient Securitizations (BSEC). Sources said the ABS market is toying with a number of ideas that are expected to materialize as early as next month.

"Looking at the market, it's the real estate related deals that are very well appreciated; the main drivers at this point are CMBS, single-credit CLO's, and hybrid convertible bonds (for real estate companies)," said Iyad Boustany, vice president at BSEC. The Lebanese market's inaugural issue is a $6 million deal BSEC led for Solidere, the real estate company in charge of rebuilding the Central District in Beirut. The SPV, Indigo Trust, issues credit-linked notes that mature in April 2005 and offer a fixed, yearly return of 5.75%. The notes bear a call option on Solidere shares on the maturing date, meaning they can outperform the minimum guaranteed yield in the event of a share price increase.

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