A glimpse of the Securitisation Survey findings
It is often difficult to identify the investors in securitisation vehicles since they often enter through cleared bearer bonds. Based on the view of our market participants, banks, insurance companies/pension funds and investment funds remain the major investors. This is not a surprise as securitisation is a product for well informed and institutional investors. As such, family offices and PE houses are also using securitisation products as investment or structuring tool, yet not at the same level as the ones mentioned before. Contrary to the EU Securitisation Regulation, the Luxembourg Securitisation Law allows the subscription by retail investors. If more than three issuances per year to retail investors, this would entail supervision by the CSSF. In any case, only few vehicles with retail investors were observed.
What are the Top 5 asset classes you observed in the last 12 months?
Luxembourg competitive advantage and challenges
Our respondents perceived the legal certainty and the possibility to create distinct and segregated compartments provided by the Luxembourg Securitisation Law as the key selling point for Luxembourg and one of its major competitive advantages. This is confirmed by the extensive use of multi-compartment vehicles. The modernisation of the Securitisation Law in 2022 is completing the top 3 in the answers from our respondents. The attractive taxation ranked 4 in the answer of the respondents (decreasing with one position compared with last year's survey) whereas it is at the same time seen as an obstacle (see below). Based on our experience, taxation is usually not the main driver to set up a securitisation vehicle in Luxembourg, but rather an element checked to ensure tax treatment is not being disadvantageous.
In your opinion, what attracts arrangers for setting up a securitisation vehicle in Luxembourg?
Securitisation in Luxembourg
PwC Market Survey 2024
