Closing of US$ 16.2 Million Securitisation Fund for Dima Healthcare SAL
Beirut, December 20, 2016: BSEC – Bemo Securitization SAL announces the closing of DHC Healthcare 2 SIF, the second securitization fund for Dima Healthcare SAL
BSEC successfully launched a US$ 16.2 Million securitization fund for Dima Healthcare SAL, following the success of the first US$ 13.9 Million fund launched in February 2014. Dima Healthcare SAL is a leading distributor of medical supplies and equipment, pharmaceuticals, and turnkey maintenance solutions in the Lebanese market.
DHC Healthcare 2 SIF purchased, with no recourse and in a true sale manner, a US$ 16.2 Million portfolio of trade receivables due from 60 hospitals and 12 various healthcare providers (laboratories, clinics and institutions). The average collection period of the portfolio ranges between 9 and 11 months, a collection period confirmed based on historical observation of many years. The portfolio is spread across hospitals in different regions with highest concentrations in Beirut followed by Metn and Baabda.
The structure provides for a 3 year revolving period during which the Fund applies the cash collections it receives under the securitized portfolio to purchase new trade receivables generated by Dima Healthcare. After the termination of the revolving period, such cash collections will be used to repay investors.
DHC Healthcare 2 SIF securitization fund has been established under the Lebanese Securitization Law No. 705 / 2005 following the authorization of the Capital Markets Authority (CMA) and enjoys a 75% risk weight assigned by the Banking Control Commission (BCC) applicable for subscribing banks.
“The first securitization fund launched 3 years ago demonstrated to us the importance of securitization for our company’s financial strength. The purpose of this second fund of a larger size is to support, in an off balance sheet manner, the expected growth especially that we recently won new distribution licenses. The non-recourse and true sale nature of the transaction is of paramount importance given the long credit terms required by the healthcare market. A supplier will not be able to finance credit sales indefinitely”, explained Michel C. Zoghzoghi, Chairman General Manager of Dima Healthcare SAL.
“We were able to observe and confirm the consistent performance of the healthcare sector during the past 3 years under the first fund set up for Dima Healthcare. It is well noticed now that payment patterns of hospitals experience delays related to the system as a whole, we haven’t seen however any cases of losses or bankruptcies. A significant part of obligors, mainly the hospitals have been operating for more than 75 years - and have solid financial background”, said Ronald Yazbeck, CEO of BSEC. “The healthcare industry is one of the world’s fastest growing industries and we have a strong confidence in the performance of the DHC Healthcare 2 fund”.
The deal is structured, arranged and lead managed by BSEC, a financial institution specialized in structured finance. The issuance is subscribed by Banque BEMO, Allianz SNA, BBAC, Banque Misr Liban, Société Générale de Banque au Liban, First National Bank, BLC Bank, BEMO Europe Banque Privée, CreditBank, FFA Private Bank and Saradar Bank.
The legal counsel of BSEC on the transaction is Prof. Nasri Antoine Diab Law Firm.