Oaklet provides support services to institutional and semi-institutional capital market participants during the entire securitisation process.

Oaklet provides support services to institutional and semi-institutional capital market participants during the entire securitisation process, ranging from feasibility studies, data analyses, due diligence processes, auditing and issue documentation. In all these areas, Oaklet ensures that the highest quality standards are maintained.

The Oaklet team works with professional and experienced product partners (law firms, accounting firms and banks) to be able to provide its customers with the best possible market access.

The Luxembourg law of 22 March 2004 on securitisation: Download

Classic securitisation process chart:


Originator & Investor

What exactly is securitisation?

In general, securitisation refers to when a special purpose vehicle (SPV) or securitisation fund is used to convert equivalent, illiquid and non-marketable assets into financial instruments that can be traded on the capital market.

The so-called originator transfers the assets to the company that issues these as securities; the resulting cash flows are collateralised only by means of the assets transferred.

The Luxembourg law does not provide for any restrictions regarding the assets that are capable of being securitised. In principle, this means that all tangible and intangible assets can be securitised, providing that foreseeable cash flows are expected from such assets.

Advantages

For the Originator securitisation may offer the following advantages:

  • better placement possibilities
  • alternative financing method
  • equity relief and higher profitability
  • better risk distribution
  • liquidity increase
  • higher flexibility

The advantages for the Investor are:

  • changing the regulatory classification
  • attractive investment opportunities
  • diversifying the investment portfolio
  • reducing counterparty default risks

Scope of application

There are numerous examples of securitisation transactions, including the traditional securitisation of loans or securities as well as the securitisation of mezzanine structures and all other conceivable types of alternative investments.

Oaklet specialises primarily in the securitisation of customized indices, re-wrappers, non-UCITS assets and alternative investments. Moreover, as the first CO2-neutral company, Oaklet further focuses on structuring ESG investments.

The vehicle

The securitisation vehicle can be organised as a corporation or a purely contractual arrangement, such as an unincorporated securitisation fund. The latter is administered by a management company.

Securitisation vehicles can be broken down into several compartments, which are each ring-fenced and independently and separately liable.

Investor protection

Another important aspect of the law on securitisation is ensuring a high level of investor protection and reducing the issuer risk.

Securities are usually exposed to the so-called issuer risk, which represents the risk that the respective issuer may become insolvent. In this case, there would no longer be any guarantee that the issuer can actually meet its payment obligations at the end of the securities' term, meaning that the investor is likely to experience a total loss of the invested capital – irrespective of expected performances.

What is special about securitisation vehicles is that they create a so-called compartment for each security.

The compartment is basically a pool of segregated assets that acts commercially and legally independently of the other compartments. This means that none of the securities are exposed to the risks of the respective other securities.