Clifford Chance
New Law Revising Mortgage Bank Regime in Luxembourg
8 August 2013
The Luxembourg law provisions on mortgage banks (banques d'émission de lettres de gage) and mortgage bonds (lettres de gage, Pfandbriefe) have been amended by a law dated 27 June 2013 (the "Law") which has entered into force on 5 July 2013. The Law provides for a number of changes and innovations further strengthening the legal framework for the issuance of mortgage bonds in Luxembourg and creating new opportunities for mortgage banks in Luxembourg. The Law in particular strengthens the protection of holders of mortgage bonds in case of opening of insolvency proceedings, introduces mutual mortgage bonds as a new category of mortgage bonds and extends the scope of eligible assets backing mortgage bonds to exposure on public sector entities from or on assets located in non-OECD countries.
This briefing outlines the main features and innovations of the Law.
