A&M's Structured Credit Execution and Advisory team worked with Vehis Fin1 sp. Z.o.o. (Vehis) leadership as sole advisor to deliver its inaugural warehouse securitisation for growth. This is the first warehouse securitisation of its type in Poland — transacted with no supranational involvement. 

Client challenge

Alvarez & Marsal (A&M) was retained by Vehis, a rapidly growing and successful car leasing business in Poland, to advise on securitisation financing to facilitate the company’s growth over the medium term. A&M was selected based on a range of factors, including a differentiated advisory and full-service securitisation-arranging offering, incorporating all elements required by the client. 
•    Vehis had been successfully expanding using a combination of private equity sponsorship, factoring and bank financing.
•    It needed a sizeable institutional debt structure in place to avoid limitations on growth.
•    Vehis’s medium-term funding position depended on identifying asset risk drivers and mitigants, as well as prospective financing counterparties who could act as aligned partners in this crucial growth stage.
•    Very important was ensuring minimal operational disruption to the company’s internal monitoring and risk management processes
•    While factoring in the global macroeconomic outlook and wider market turbulence.

A&M's solution

A business and portfolio assessment process was used to help drive decisions on transaction format, selection of prospective financing partners and all ramifications. In the end, combining mezzanine and senior financing partners, the transaction format and the portfolio criteria achieved every required goal while also producing several “firsts” in the market. 

•    The executed transaction was a private cash warehouse securitisation of auto leases, including residual value, with a fully ramped size of c. PLN 1.3 billion. 
•    Senior and mezzanine investors invested in the respective note classes issued by a de novo SPV, while the equity was retained by Vehis.
•    A significant volume of new leasing origination could be scheduled over the two-year ramp horizon at a very cost-effective level for the client, while being operationally flexible.
•    The transaction was structured with the requirements of STS (simple, transparent and standardised securitisation) in mind, though no application for such was made.

 
A&M worked closely with the company’s teams:
•    Ensuring adherence to requirements driven by regulation as well as best practice in the market,
•    Helping the client manage the transaction effectively in the long term.
•    Taking into account the very challenging macroeconomic backdrop and international investor appetite for CEE risk.
This complex and unusual transaction illustrates the benefits of an advisor who brings both wide investor contacts and deep understanding of their specific risk appetites.

A&M's impact

Key achievements:
1.    Significant volume of committed, cost-effective financing
2.    Diversification of financing sources
3.    Compatibility with existing business structure of the client

Quotes from the client

Jan Bujak, Vehis CFO
“The securitization transaction we carried out was a pioneer structure in the Polish market. The number of entities involved and the complex nature of the transaction made the preparation process long and difficult, however with the support of A&M experts, it was successfully completed.”

Grzegorz Tracz, Vehis CEO
“From the very beginning we aimed to become one of the leaders in the Polish car and leasing market. With a unique business model and a very good product we had the ability to grow fast. Now we have obtained financing which will allow us to significantly increase the scale and give our customers the full benefit of car ownership without unnecessary hassle.“