Is securitization replacing traditional German Spezialfonds?

„Securitisations offer companies the opportunity to bundle assets such as receivables, loans or other cash flows and package them into tradable securities that investors can acquire via their bank using the respective ISIN. This allows capital to be raised efficiently – an attractive alternative to traditional forms of financing, especially in times of restrictive lending,“ explains Daniel Knoblach, Board Member of Super Global Services S.A.

The location question

Luxembourg has established itself as one of the most attractive locations for securitisation, Knoblach continued. With the Luxembourg Securitisation Act of 2004, the country offers a robust and clear legal framework tailored to the specific requirements of securitisation structures. This has made Luxembourg a leading centre for securitisation worldwide and offers numerous advantages that go far beyond traditional financing solutions.

Advantages of securitisation in Luxembourg

A key advantage of securitisations in Luxembourg is their high degree of flexibility. This includes, on the one hand, the wide variety of assets that can be securitised. Knoblach comments: „Thus, classic assets such as shares, receivables, loans and real estate can be bundled, but alternative investments such as cryptocurrencies or derivatives can also be included in securitisation structures. This makes it possible to access a broader range of asset classes and to optimally adapt the structures to the individual needs of investors.“

Continue reading ↓

Speed, efficiency and cost

Another significant advantage is the speed and efficiency with which they can be structured and issued. Compared to traditional investment vehicles, such as specialised funds for example, securitisations can be brought to market more quickly. This is particularly valuable for companies that want to take advantage of time-critical market opportunities. Thanks to the established regulatory framework in Luxembourg and the advantageous legal structure compared to other forms of financing, securitisations can not only be set up more quickly, but often also more cost-effectively.

Safety and transparency

Furthermore, securitisations offer a high level of security and transparency through the requirement for external auditor examination. This builds investor confidence, particularly among institutional investors who rely on audited and professional structures. This transparency also distinguishes securitisations in Luxembourg from offshore solutions, which often have lower regulatory density and thus offer less security.

Further benefits

A further advantage is the possibility of stock market listing and assessment by rating agencies. Knoblach: „This increases the visibility and liquidity of securitised securities, making them more attractive to investors. At the same time, securitisations offer the character of a security, which is of particular interest to banks. They can use securitisations to optimise their capital requirements and reduce their equity backing. This makes the securitisation vehicle an attractive instrument for managing capital requirements more efficiently.“

Tax advantages and legal certainty

In addition to the structural benefits, securitisations in Luxembourg also offer tax advantages. The country has concluded numerous Double Taxation Agreements (DTAs), ensuring that securitisation vehicles can often be structured in a tax-optimised or even tax-neutral manner. This makes Luxembourg attractive to international investors who can benefit from these agreements. „However, caution is advised here: companies should obtain comprehensive tax advice in advance to ensure that all legal requirements are met and tax risks are avoided,“ says Daniel Knoblach.