Educational Resource

Fund Structure Overview

Understanding the AFA Lux Securitisation Fund framework

This page is informational and describes structural characteristics of Luxembourg securitisation vehicles. It is not a product offer.

AFA Lux Securitisation Fund – Structural Overview

The AFA Lux Securitisation Fund is a Luxembourg securitisation fund established under the Luxembourg Securitisation Law of 22 March 2004, as amended, including the modernisation introduced by the Law of 9 February 2022. This legal framework is widely regarded as one of Europe's most robust and flexible regimes for structured finance and private credit transactions. The Fund is structured as a multi-compartment securitisation vehicle, allowing the creation of segregated investment strategies within a single legal platform.

Compartment Structure & Ring-Fencing

Each compartment of the AFA Lux Securitisation Fund is legally and economically segregated from all others. This means:

Assets and liabilities are isolated at compartment level
Investors in one compartment are not exposed to risks arising from other strategies
Creditors have recourse only to the assets of the relevant compartment

This ring-fencing mechanism is a cornerstone of Luxembourg securitisation law and provides a high level of structural investor protection.

Structural Flexibility

The Luxembourg securitisation framework allows a high degree of flexibility, enabling the Fund to adapt to different transaction types and investor requirements:

•Creation of new compartments as opportunities arise
•Ability to structure true sale (asset transfer) or synthetic (risk transfer) transactions
•Compatibility with multi-level and cross-border structures, including feeder arrangements
•Broad eligibility of asset classes, including trade receivables and private credit exposures

Quick Facts

Established Under
Luxembourg Law 2004
Modernized
February 2022
Structure Type
Multi-Compartment
Jurisdiction
Luxembourg

Key Benefits

  • Ring-fencing
  • Tax neutrality
  • Flexibility
  • Investor protection

Investor Protection Mechanisms

Multiple layers of structural safeguards

Ring-fencing

Losses are limited to the relevant compartment

Non-recourse

Investor liability is limited to invested assets

Bankruptcy remoteness

Assets protected even in originator insolvency

These mechanisms are designed to provide predictability and legal certainty, particularly for professional and institutional investors.

Tax Neutrality

Luxembourg securitisation vehicles benefit from a largely tax-neutral framework, which is a key structural feature of the regime:

No annual subscription tax
No net wealth tax
No Luxembourg withholding tax on interest or similar distributions (subject to structure)
Taxable income is generally offset through deductible payments to investors
As a result, no material taxation typically arises at vehicle level

Tax at Vehicle Level

Tax-neutral under Luxembourg securitisation law

Enhanced structural efficiency

* Tax treatment depends on the structure, the nature of the instruments issued, and applicable law. This information is provided for general informational purposes only and does not constitute tax advice.

Role of AFA Management Sàrl

AFA Management Sàrl acts as the management and structuring company of the AFA Lux Securitisation Fund, coordinating the establishment and operation of compartments in collaboration with independent Luxembourg service providers.

1

Oversees structuring and coordination of compartments

2

Works alongside independent administrators and corporate service providers

3

Acts within the framework of Luxembourg securitisation law

Regulatory & Legal Notice

The AFA Lux Securitisation Fund operates exclusively under the Luxembourg law of 22 March 2004 on securitisation, as amended. AFA Management Sàrl acts as management company of the Fund within this framework.

The Fund may issue securities only to well-informed and/or professional investors, as defined under applicable Luxembourg and EU legislation.

The information presented on this website is for informational purposes only and does not constitute an offer, solicitation, or investment advice. Any investment decision must be based exclusively on the final documentation of the relevant compartment.