LUXEMBOURG Law and Practice Contributed by: Vassiliyan Zanev and Natalja Taillefer, Loyens & Loeff Luxembourg S.à r.l.
3.8 Bonds/Notes/Securities The acquisition of the securitised risks by a securitisation undertaking must generally be financed through the issuance of financial instru - ments ( instruments financiers ) or by contracting for the whole or part of any kind of loan, the value or yield of which is linked to such risks. Both debt and equity financial instruments can be issued for this purpose. The financial instruments are as defined in the Collateral Law, which definition covers a broad range of instruments, whether they are in physi - cal form, dematerialised, transferable by book- entry or delivery, bearer or registered, endorsea - ble or not and regardless of their governing law. Based on the above, the financing arrangements of an SPE may be documented either as securi - ties (bond, notes) or as loans. If governed by Luxembourg law, the terms and conditions of the financial instruments issued by an SPE would normally include the disburse - ment and repayment modalities, interest accrual provisions, representations and covenants, as well as standard limited recourse, non-petition and subordination provisions. 3.9 Derivatives Investors may be using derivatives either to hedge risks (eg, interest rate or currency risks) or for investment purposes (eg, credit default swaps, total return swaps or credit linked notes). 3.10 Offering Memoranda In Luxembourg, the securitisation undertaking offering its securities – or, where applicable, the entities distributing or placing such securities with investors – must ensure compliance with the restrictions deriving from the Prospectus Regulation and the Prospectus Law.
Pursuant to the Prospectus Regulation (and sub - ject to the exemptions described below), no offer of debt securities may be made to the public in Luxembourg without the prior publication of a Prospectus Regulation-compliant prospectus. Such prospectus needs to comply with the infor - mation requirements set out in the Prospectus Regulation and in the Commission Delegated Regulation (EU) 2019/980 of 14 March 2019, as amended, including the relevant annexes. The Prospectus Regulation provides that an offer of debt securities to the public is exempted from the obligation to publish a prospectus if, inter alia: • the offer is addressed solely to qualified investors, as defined in the Prospectus Regu - lation; • the offer is addressed to fewer than 150 natu - ral or legal persons per member state, other than qualified investors; • the offer is addressed to investors who acquire securities for a total consideration of at least EUR100,000 per investor, for each separate offer; or • the offered securities have a denomination per unit of at least EUR100,000.
4. Laws and Regulations Specifically Relating to Securitisation 4.1 Specific Disclosure Laws or Regulations
Regarding transactions falling within the scope of the Securitisation Regulation, the latter imposes extensive transparency obligations on the originator, the sponsor and the securitisation special purpose entities (SSPEs, as defined in the Securitisation Regulation).
229 CHAMBERS.COM
Powered by FlippingBook