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Debt Issuance 2017-07-19T15:46:35+00:00

DEBT ISSUANCE LUXEMBOURG

Debt issuance Luxembourg is not imposed any limitation in terms of borrowing. Several types of financial instruments are at the disposal of Luxembourg Companies :

Loans or Mortgages

Companies can get loans – conventional loan, secured loan, mortgage loan from a bank, one (or more) of its shareholders, to third parties. Throughout the lifeof the contract, the company will par interest at the rate specified in the agreement. At the end of the contract, it will repay the capital that has been lent.

Bond Issuance

The bond issuance period may be short, medium or long. Bonds can easily be transferred to a third party and generates a fixed or variable interest rate most often based on a reference rate or index (Euribor, Libor, etc). The interest they bear is payable periodically or at maturity, depending on the coupon’s terms and conditions.

Subordinated & Convertible Bonds

Subordinated bonds/loans are debt instruments which are refundable after all other loans/bonds are repaid. Convertible bonds bear a fixed interest and can be converted into shares depending on certain conditions. Bond issuance may include subordination as well as convertibility.

Contact Hance Law

DEBT ISSUANCE

NOT IMPOSED ANY LIMITATION IN TERMS OF BORROWING

Hybrid Debt Instruments Luxembourg

These instruments are considered hybrid as they may contain different clauses in their offering memorandum : some are related to a fixed interest instrument while others are related to a shareholder’s right. The following types of hybrid debt instruments may be chosen by Luxembourg companies :

  • Convertible Private Equity Certificates (CPEC)
  • Private Equity Certificates (PEC)
  • Profit Participative Bonds
  • Warrants
  • Equity loans
  • Tracker Certificates

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