Luxembourg Securitisation Vehicles

This episode is also available as a blog post: https://10leaves.ae/publications/luxembourg/luxembourg-securitisation-vehicles Why setup a securitisation vehicle in Luxembourg? In Luxembourg, securitisation of a wide range of assets, loans, bonds, incomes and risks is allowed. In addition to this, risks related to debt, movable or immovable property, tangible and intangible assets are also allowed to be securitised. In general, anything that is a store of future income can be securitised in Luxembourg. Issuers mainly use securitisation as an alternative to funding from banks and other formal lending institutions. Luxembourg offers many investment vehicles that can be used for securitisation transactions. Luxembourg has an extensive Securitisation Law, that is innovative and designed for cross-border transactions, especially in the European Union. This has become very popular and there are currently more than 1500 securitisation vehicles, with over 7,000 compartments in Luxembourg, resulting in over 35% market share in all of Europe. Other advantages include: choice between various legal structures – companies and well as investment fund structures the securitisation vehicle can be supervised or non-supervised Such vehicles can be listed Tax-neutrality Higher levels of investor protection Can create compartments Recognition of ring-fencing