A new securitisation law in Luxembourg, dated 22 March, 2004, has laid the foundations for a legal, regulatory and tax framework for securitisation vehicles in Luxembourg. The main features and advantages of this new securitisation law, as well as their practical application, are discussed in this article.
A securitisation is a type of structured financing in which a pool of financial assets (such as loans or mortgages) is transferred to a special purpose vehicle (SPV) that then issues debt backed solely by the assets (collateral) transferred and payments derived from those assets.
