The amendment of the Luxembourg securitisation law

The amendments to the Luxembourg Securitisation Law are also relevant for German issuers.

The new version of the Luxembourg Securitisation Law offers more flexibility in structuring and increases legal certainty for traditional securitisations with regard to the choice of financial instruments and the more efficient use of compartments. In addition, it creates the conditions for collateralized loan obligations (the "CLOs") transactions to be carried out in Luxembourg in the future.

On the main adjustments to the Luxembourg Securitisation Law:

• Expansion of financing options:
  Securitisation special purpose vehicles (the "SPVs") will be allowed to finance themselves through financial instruments in the future. In addition to securities, financing through bank loans will also be possible in the future.
• Active management of the collateral pool:
  Even under the Restatement, active management is generally precluded, but a loan portfolio may now be actively managed in collateralized debt obligations (the "CDOs") or CLOs by statutory definition as long as there is no issuance of financial instruments to the public.
• Introduction of a new regulatory framework:
  Inclusion of the criteria of the Luxembourg Financial Supervisory Authority (Commission de Surveillance du Secteur Financier, the "CSSF") for the public issuance of financial instruments.
• Introduction of new legal forms for flexibility in structuring:
  - General partnership ("société en nom collectif");
  - simple limited partnership ("société en commandite simple");
  - special limited partnership ("société en commandite spéciale"); and
  - simplified stock corporation ("société par actions simplifiée").
• Guarantees / sureties in favor of third parties:
  The revision of the Luxembourg Securitisation Law allows for the provision of collateral / guarantees to third parties while maintaining a high level of protection for investors, which increases flexibility in structuring.