Luxembourg

In brief: Dexia has selected leads for the first benchmark offering from its Luxembourg registered arm, Dexia LdG Banque. Dexia intends to take advantage of the greater flexibility on offer under that country’s jurisdiction.

Luxembourg’s covered bond framework is expected to be updated to introduce a new asset class of “movable objects” lettres de gage, including ships and aircraft, according to the country’s issuers. Under a parliamentary bill, certain ABS will also become eligible for cover pools, a minimum overcollateralisation level of 102% will be introduced, and the maximum loan-to-value ratio of residential mortgages will be increased from 60% to 80%.

Eurohypo Luxembourg priced its $500m three year lettres de gage publiques issue this (Friday) morning having bookbuilt the issue against an unfavourable Treasury market backdrop.

Eurohypo Luxembourg is in the market with a $500m three year lettres de gage Eurobond. The book is almost fully subscribed and pricing is expected by tomorrow (Friday) morning.

Standard & Poor’s has assigned a triple-A rating to Dexia LdG Banque’s public sector covered bonds and shown how the Luxembourg-based issuer is taking advantage of the jurisdiction's relaxed eligibility criteria.

Dexia LdG Banque launched the first issues off its new Eu25bn MTN programme last Friday (September 28), two Eu675m floating rate notes backed by public sector collateral.

It’s not the first time, and it won’t be the last, that participants in the German capital market have decamped to Luxembourg in response to restrictive legislation or tax rules. Philip Moore reports.