Usual Luxembourg security package
Luxembourg is one of the leading domiciles worldwide for
international investment portfolio acquisition vehicles.
Acquisition financing are usually secured against the assets and
cash flows of the target company as well as of the buyout
vehicle.
In practice, given that a Luxembourg holding company generally
does not have any operational activities, shares, receivables and
cash on bank are the most important assets to cover.
Pledges are the common form of security for such movable
property. They are governed by the Law of 5 August 2005 on
financial collateral arrangements, as amended (the
Financial Collateral Act), which transposed
Directive 2002/47/EC of 6 June 2002 on financial collateral
arrangements (the Collateral Directive) into
national law.
