“The transaction’s success reinforces the view that the local capital markets are in need of alternative and innovative investment opportunities, especially because of 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.

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 percent, and Class B, which is subordinated to Class A and retained by RYMCO.

The Class A noteholders will benefit from first loss protection of 22.5 percent provided by the subordination of the Class B note and a cash reserve of 3.7 percent fully funded on closing. An excess spread trapping mechanism is also provided.

The structure provides for a three-year replenishing period during which the fund may purchase additional auto loans subject to certain conditions. This may result in a total financing to RYMCO of up to $40 million.

The transaction provides RYMCO with an alternative source of funding and allows it to enhance its debt to equity ratio. “We have identified the fleet business as an attractive opportunity to sustain our growth. Through this transaction we were able to secure financing needs for this segment through an attractive revolving instrument for the next three years,” said Abdo Sweidan, RYMCO’s CEO.

The deal is 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 is Nasri A. Diab.

BSEC is a financial institution specialized in structured finance, licensed as a financial institution, and a wholly owned subsidiary of Banque BEMO. It is regulated by the Central Bank. Rasamny Younis Motor Company SAL (RYMCO) is the exclusive distributor in Lebanon of Nissan, Infiniti, and GMC brands and the franchise operator of the Infiniti brand in London