Beirut, Lebanon, December 04, 2017 – MedInvesment Bank s.a.l. (“MIB”) and Kurban Group s.a.l. (Holding) (“Kurban Group”) announced on October 31, 2017 the successful closing of ABA SEC I MSF, the first Rental Fleet Securitization in Lebanon and the Levant region and the largest non-mortgage securitization in Lebanon to date.
The transaction consisted of securitizing the rental fleets of the Kurban Group of companies operating in the automotive sector namely Middle East Car Rental (MECAR) SARL (the agent of Avis Rent a Car in Lebanon), Fleet Management Company (FMC) SAL (the agent of Budget Rent A Car in Lebanon) and Allo Transport SAL (the leading Lebanese transportation company) (together the “Companies”).
Commenting on the transaction, Mr. Raja Halim Kurban, the Managing Director of the Companies, said: “Closing this very innovative securitization transaction in these challenging times is an important milestone for our Companies, and we believe will be key in the consolidation of our leadership position in the Lebanese transportation sector. This transaction allowed the Companies to access a medium-term funding source at a competitive and fixed cost, and to diversify further their funding sources. I am glad it was a success.”
In his turn, Mr. Adel Jabre, Managing Director of MIB, the sole lead manager of ABA SEC I, highlighted the importance of this transaction saying: “It is an important milestone for our Banking Group as well as the local and regional securitization industry, since it is the largest Asset Backed Securitization (ABS) executed out of Lebanon to-date, the first Rental Fleet Securitization out of Lebanon and the Levant region and the first securitization with a multi-seller type of structure in the Middle East region.”
Mr. Samer Salam, Chief Executive Officer of SaudiMed Investment Company (SaudiMed) which acted as the technical advisor to MIB, explained further: “The transaction is a securitization of the rental fleets of MECAR, FMC and Allo Transport. It was a challenge executing this transaction given its novelty, the numerous regulatory constraints that we had to overcome, the prevailing market conditions and its size which puts it in a different league when compared to deals that have been structured in the Lebanese market. I am happy it was a success and that we were able to serve our client in the best way possible”.
Lastly, Mr. Abdallah Nassif, Head of Structured Finance at SaudiMed noted: “The aggregate transaction size is close to USD25 million with four tranches of Notes issued. The senior notes were placed with sophisticated investors. The deal provides for a 3.5 years replenishing period during which additional funding could be accessed by the Companies. The transaction was approved by the Capital Markets Authority, and the risk weighted assets of the senior notes was set by the Banking Control Commission at 75%”.
Soumrani Lawyers and Legal Counsels acted as legal advisors to MedInvestment Bank on this transaction.
MedInvestment Bank s.a.l. & SaudiMed Investment Company are wholly owned subsidiaries of Bankmed s.a.l., which is part of GroupMed Holding, a prominent regional conglomerate with a global network of companies spanning Lebanon, Saudi Arabia, Turkey, Cyprus, UAE Iraq, and Switzerland, offering an integrated platform of customized and innovative financial advisory and financing solutions and covering a wide spectrum of market sectors.
The Kurban Group is specialized in the art of travel and transport. It was founded in 1952 by Mr Halim Kurban and ever since the Kurban name has been leaving its mark in the travel, tourism and transportation industries. The ground transportation affiliates of the Kurban Group are leaders in the Lebanese market: MECAR and FMC are currently operating the largest rental and leasing fleets in Lebanon (under the brands of Avis and Budget) and Allo Transport is by far the largest taxi company in Lebanon.