Strategic Intent - About us - Lux Credit Securities

Our firm strives to be a reliable, transparent, accountable and secure investment platform for private and institutional investors and an innovative issuer of capital protected high fixed yield investment bonds. We have based our strategy on the following cornerstones.

True Securitization

Investors tend to rely less on credit ratings and prefer lower but fixed yields, longer tenures and true securitization of their capital, In respond to this trend Lux Credit has structured its bonds in such way that the principal capital is secured with investment grade assets which are non-correlated to market risks with a market value of no less than 100% in equivalent fixed (non-depleting) face value. We securitize these assets throughout the whole investment period in a dedicated legal structure (compartment) and place them under an independent security trustee to ensure no other creditors but the investors have a claim on them.

High Fixed Income

While similar principal and income protection securities usually offer substantial lower coupon rates, Lux Credit provides substantially higher coupon rates, in particular over longer tenures. We do not make a secret of our strategy. We simply invest in secured loans with a substanial higher interest rate than the coupon rate of the bonds. The net margin is therefore already established for the full loan term. If loan maturities occur prior to the bond maturity the principal and spread will be reinvested, allowing for compounding investment returns.

Credit Risk

Lux Credit invests only in secured loans that are fully collateralized by investment grade financial securities, herewith fully eliminating the credit risk on the secured loans.In principle the loans are herewith non-correlated to global macro-economic developments like interest, currency, commodities and market volatility.

The financial securities like credit-insurance, state export guaranties, cash-backed bank guaranties, etc.have a fixed value, are rapidly turned into liquid assets and relatively easy to be repossed in case of lender's default. The risk exists of course theoretically, but the investment is fully recoverable.

As the currency of the bond principal and the secured loans in which we invest are the same the bondholders and lenders are not exposed to the volatile curency exchange rates and unexpected currency exchange losses. We herewith avoid the exorbitant cost for hedging and “stop loss” strategies.

Optimal Liquidity

In addition to high fixed income, capital protection and mitigated credit risk, Lux Credit values solvency (in the sense of liquidity coverage) as a key success factor for our bond investment. We plan ahead for optimal liquidity positions and adjust our cash positions and cash flows throughout the investment period to ensure we can meet coupon payments and servicing of assets without risking liquidity shortage. We plan for optimal spread of loan maturities and in particular for liquidity sufficiency at bond maturity. Lux Credit considers liquidity risk management of significant importance. We have therefore installed a continuous liquidity audit procedure whereby the external auditor provides on a regular base a certificate of liquidity sufficiency.

Accountability

Being, situated in one of the largest and most professional centers, our undertakings are fully compliant with the applicable securities regulations.We ensure we comply with the latest global accounting standards and the regulatory and statutory reporting requirements of the authorities. We provide timely and accurate accounting reports to our investors and all other stakeholders. We apply only accounting methodologies that are approved by external auditors and actuaries. All administrative, accounting and auditing operations are undertaken by independent accredited firms. All monetary transactions are conducted by top-rated banks, clearing and settlement institutions.

Lux Credit strives to be fully accountable for results. We do not defer any of the potential risk to our investor’ but only to our shareholders. Net retained earnings for shareholders are always and solely after the principal and interest has been paid to the bondholders. There are no commissions and costs at the expense of our bondholder’ interest or principal invested capital, nor do we claim a share of the investor;s returns upon success. Herewith is not just our accountability guaranteed but also our integrity.