BSEC launches securitization for Gargour

BEMO Securitization (BSEC) said it has launched a $15.7 million securitization investment fund for automobile distributor T. Gargour & Fils (TGF).

The fund, named TGF Star II SIF, has issued two classes of notes against its purchases of auto loans extended by TGF to its customers. Senior class ‘A’ notes that have a total amount of $13.35 million and a maturity of 3.75 years have been placed with local banks and an investment fund. One subordinated class ‘B’ note, valued at $2.35 million, is held by TGF “for credit enhancement purposes.”

The class ‘A’ notes have been subscribed to by Banque BEMO, Fransa Invest Bank, BLC Bank, BBAC, BLOM Bond Fund, Credit Libanais Investment Bank, and BSL Bank.

This is BSEC’s second securitization investment fund and fifth issuance for TGF, the distributor of Mercedes-Benz and other automobile brands in the Levant. BSEC is a wholly owned subsidiary of Banque BEMO.

The new fund replaces the TGF Star SIF fund launched in 2012 that included four consecutive issuances of an aggregate size of $16.3 million, according to a statement by BSEC. TGF Star II SIF could also perform multiple issuances under the same platform.

“TGF has seen a lot of value since the inception of its first securitization investment fund. The company was able to finance individual operations and was capable of boosting its sales activity in a consistent manner,” said Robert Khabbaz, Chief Financial Officer of the TGF group.

Similar to the previous fund, the structure of the new one includes protective measures to the class ‘A’ noteholders, such as cash reserves and the subordination of the class ‘B’ note.

TGF Star II SIF, which is structured, arranged, placed and managed by BSEC, has obtained the Capital Markets Authority’s approval.