BEIRUT: The financial arm of BankMed and a leading Lebanese car dealer have completed the first vehicle inventory securitization deal in the MENA region.
MedInvesment Bank and Rasamny Younis Motor Company announced the closing of the RYMCO SEC I MSF during a news conference at RYMCO’s headquarters in Shiyah.
Over a four-year period, the deal is expected to raise up to $250 million for RYMCO, with the initial offering drawing close to $15 million.
Securitization is the process of taking an illiquid asset, or group of assets, and through financial engineering, transforming it into a tradable security.
The RYMCO deal allows the company to raise operating capital based off the total value of its new car inventory from a wide group of investors.
“The aggregate transaction size is close to $15 million with two tranches of notes placed with 35 investors,” said Abdallah Nassif, head of Structured Finance at SaudiMed Investment Company.
The chairman of RYMCO hailed the agreement.
“Closing this very challenging and innovative securitization transaction proves yet again that RYMCO is on the forefront of financial innovation,” Faiyez C. Ramam said.
“This transaction gave RYMCO access to off-balance sheet funding and allowed it to diversify further its funding sources by tapping a new investor base.
“I am glad it was a success and I am confident RYMCO will continue to set the standards when it comes to financial innovation.”
Mohamed Ali Beyhum, executive general manager of BankMed and MedInvestmentBank, the lead manager of deal, highlighted the importance of the pioneering nature of the deal.
“It’s an important milestone for our banking group as well as the local and regional securitization industry, since it is the largest non-mortgage asset backed securitization executed out of Lebanon to-date, the first inventory securitization in the MENA region and the first securitization of non-financial assets out of Lebanon,” Beyhem explained.
Samer Salam, chief executive officer of SaudiMed Investment Company that acted as a technical adviser to MedInvestmentBank, explained that the transaction was a securitization of a portion of the brand new vehicle inventory of RYMCO.
In October 2009, BEMO Securitization SAL successfully closed a $13.14 million auto loan securitization for RYMCO.
Rasamny Younis Motor Company SAL is a joint stock company established in 1957 in Lebanon and is the only automotive dealer to be listed on the Beirut Stock Exchange since 1998.