03/12/2020 - Capital Markets
HIGHWAY TO THE DEBT ZONE
Capital markets play a key role in supporting economic growth by allocating capital to projects that help create jobs, provide public services, build infrastructure and drive innovation. Luxembourg’s capital markets infrastructure and unique international expertise make it the perfect place for companies of all sizes to finance their European and global activities.
Continuously driving innovation, Luxembourg has grown to become an international leader in debt capital, a key hub for securitisation and structured finance vehicles, as well as an acknowledged platform for hosting landmark international IPOs.
The advantage of the Luxembourg capital markets offering is that it can be used exactly where it is needed and can blend perfectly into an international structure with non-Luxembourg elements.
The Luxembourg Stock Exchange (LuxSE) has a long history of pioneering in capital markets.
In 1963, it listed the first-ever Eurobond. This was placed for the Italian company Autostrade, denominated in a foreign currency ($) and based on English law. Further milestones include the first listing of a sukuk (Sharia compliant bond) in 2002, the listing of the world’s first green bond in 2007 and the first listing of a dim sum bond in Europe in 2011.
The Luxembourg Green Exchange (LGX), is the latest entry in an impressive track record of innovation. With the launch of the first global exchange platform for sustainable, green and social securities, the stock exchange actively contributes to the development of a global taxonomy.
An exchange like no other:
Thanks to a wealth of post-trading service providers, Luxembourg has become a global centre for all aspects of collateral management including clearing, settlement, custody and asset servicing.
The largest provider is Clearstream, the leading international central securities depository (ICSD). Through its services, the company connects issuers and investors around the world.
Clearstream is not alone. Three other post-trade providers are hosted in Luxembourg, offering access to the European Central Bank. Their combined services include the issuance, settlement and custody of securities, as well as investment fund services and global securities financing.
As a cross-border financial centre, Luxembourg offers the perfect framework within which to set up a vehicle for accessing international capital markets, whether for finance purposes of an international group, or for securitisation purposes.”
Throughout the years, Luxembourg has maintained its position as one of the leading centres for securitisation and structured finance vehicles. One of the main reasons for this position is the existence of a dedicated securitisation law which ensures innovation and legal certainty in securitisation structures.
Luxembourg is home to more than 1,300 securitisation vehicles.
Assigning assets to a securitisation company can offer a range of advantages, such as access to capital at a reduced cost, without the need to take out a bank loan or issue more shares. Securitisation also allows non-liquid assets to be converted into cash, cut the cost of financing and transfer risks to external investors.
Under Luxembourg law, an extremely wide range of assets can be securitised:
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