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In the different European statistics, Luxembourg usually ranks first or second with regards to the number of securitisation vehicles and transactions. We are optimistic that the securitisation market will further grow and that Luxembourg will keep its position as prime location for securitisation transactions in Europe.
One of the key advantages of Luxembourg is the concept of “compartments”, segregated parts of assets and liabilities within one entity. Contrary to other jurisdictions, in Luxembourg this segregation of assets between compartments is defined by law and we often observe structures with more than ten compartments, some even several hundred.
The Luxembourg Securitisation Law is an opt-in law and provides a wide definition for securitisation, namely any type of assets or risks can be securitised and refinanced by the issuance of financial instruments. This is significantly different to the definition of the European Securitisation Regulation which refers to the transfer of credit risk only and requires the refinancing to be split into multiple subordinated tranches. The Luxembourg Securitisation Law caters for this type of securitisation but also goes beyond.
Furthermore, there is no limitation on the investor basis, investments into a Luxembourg securitisation vehicle are open to all types of investors. A direct supervision by the Luxembourg regulator CSSF is only required when a continuous issue to the public occurs, which is not often the case.
All in all, Luxembourg securitisation vehicles are a very efficient tool for financing or creating investment opportunities at a reasonable cost and quick time-to-market.
Our PwC Luxembourg Securitisation Core Group consists of 16 Partners & Directors leading more than 80 Securitisation experts. Whatever your requirements, our dedicated audit, tax and consulting teams have the necessary experience to guide you through the realms of the Luxembourgish market as well as local and European regulations and will make achieving your goals their number one priority.
Xavier Balthazar
Advisory Partner, Asset Management, Regulatory & Compliance, PwC Luxembourg
Tel: +352 49 48 48 3299
Luc Petit
Tax Partner, Clients & Markets Hedge Funds Leader, PwC Luxembourg
Tel: +352 49 48 48 3148