Securitisation vehicles in Luxembourg - Breedewee Titrisation

Securitisation vehicles in Luxembourg

A brief of the securitisation

No limitation on securitized assets

Tax neutrality for securitization transactions

Can be segregated via multiple compartments

No supervision unless securities are offered to the public on a continuous basis

What is securitisation under Luxembourg law?

Securitisation is defined by Luxembourg law as the operation by which a Securitised Vehicle acquires (directly or through the intermediary of another entity) via the issue of transferable securities, the value and return of which vary according to the level of risk.

With securitisation, there are various ways of obtaining exposure to the risks of the VT, via the acquisition of assets, a guarantee on liabilities or via a bond.

There are no restrictions on the types of assets securitized at VT. More concretely, all asset classes generating cash flow can be securitized. Whether they are receivables, real estate, mortgages or a patent.

Below is an explanatory diagram of the securitisation vehicle.

Legal aspects

The securitisation vehicle can be set up in different forms :

- a company (securitisation company)
- a contractual form (more commonly securitisation funds)

A - If you opt for the form of a securitisation company, here are the possibilities:

- société anonyme (SA)
- société à responsabilité limitée (Sàrl)
- société en commandite par actions (SCA)
- société coopérative organisée sous la forme d'une société anonyme (SCoSA)

To go further, there is no restriction on the level of minimum share capital determined for the securitisation company. The minimum share capital depends on the legal form adopted (e.g. 12,000 EUR for a GmbH and 30,000 EUR for a public limited company).

A securitisation company has the possibility of adopting a structure with different compartments. Each compartment has a strictly separate set of assets and liabilities.

In order to use the different compartments correctly, there must be authorisation in the constituent documents of the VT.

B - Securitisation funds

If you decide to opt for the contractual form (securitisation funds), these can take the form of fiduciary contracts or co-ownership structures (more commonly mutual funds - FCPs).

If the securitisation fund does not have legal personality (you have not opted for the securitisation company), then it must be administered by a management company whose registered office is based in Luxembourg.

Like its sister (securitisation company), it can adopt a structure with different compartments. Each compartment has a strictly separate set of assets and liabilities. In addition, the fund is not subject to any minimum share capital requirements.

Services offered by Breedewee Titrisation ?

Breedewee Titrisation is the department of Maison Breedewee in charge of developing our Luxembourg securitisation activity.

Breedewee Titrisation aims to meet the growing financial needs of these players (project owners and investors).

Breedewee Titrisation builds a financial product (share or bond), fully regulated by the Luxembourg law of 22 March 2004. The issue of this security by the securitisation company, subscribed by investors, will be invested in the project holder in accordance with the investment brochure.

For more information, please contact our experts.

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