Investments into distressed debt – looking at Luxembourg investment solutions

PRESENTATION

Over the past 20 years, investments into debt have become increasingly more popular. A sub-category of debt investments are investments into distressed debt, which are an important niche market which soared over the last decade, contributing to the Grand Duchy’s success as a prime location for Alternative Investments. 

Broadly speaking, investments into distressed debt rely on the acquisition of non-performing loans or other distressed debt instruments at a price below par value. Thereafter, the idea is to realize capital gains upon the disposal or repayment of the debt instrument once the financial situation of the debtor improves. 

Investments into distressed debt may be made via different investment vehicles including, in particular, Luxembourg companies, securitization vehicles and funds, or a combination thereof. In some cases, investments may also involve foreign investment vehicles (for example, a local securitization vehicle). 

The choice of the optimal investment platform may depend on several factors such as the preferences of the investors, requirements from the perspective of the investment jurisdiction(s), constraints from a regulatory perspective and the magnitude of the investment.

This seminar will provide participants with a clear view on how investments into distressed debt may be made in Luxembourg and consider substance and transfer pricing aspects as well as potential reporting obligations under the mandatory disclosure regime (DAC 6).

• Background 

• Regulatory considerations 

• Luxembourg investment vehicles to invest into debt

• • Luxembourg funds

  • Luxembourg companies

  • Luxembourg securitization vehicles

• Luxembourg investment platforms for investing into debt

• • Combination of Luxembourg vehicles

  • Combination of Luxembourg and foreign vehicles

• Substance requirements

• Transfer pricing considerations

• The mandatory disclosure regime (DAC 6)

• Conclusion

SPEAKERS

OLIVER R. HOOR
Tax Partner and Head of Transfer Pricing, ATOZ Tax Advisers

Oliver is a Partner in the International & Corporate Tax department at ATOZ.

A tax professional since 2003, Oliver has experience in Luxembourg and international taxation with a focus on alternative Investments (private equity, real estate, sovereign wealth funds, hedge funds), mergers & acquisitions and multinational groups. He advises clients on all direct tax aspects regarding deal structuring, maintenance, reorganisations and exit planning. He also holds the titles of Head of Transfer Pricing and of the German Desk.

Oliver is the author of more than 250 articles and books on Luxembourg and international taxation including Transfer Pricing and related documentation requirements, the OECD Base Erosion and Profit Shifting (BEPS) Project and the EU Anti-Tax Avoidance Directives (ATAD 1/ATAD 2), reporting obligations of tax intermediaries (DAC6), the OECD Model Tax Convention and Tax Treaties, EU Law and the State Aid investigations of the EU Commission (see www.atoz.lu/media-room). He is also a regular speaker at conferences as well as being a lecturer with Legitech and ILA.

Oliver is qualified as a Chartered Accountant in Luxembourg ("Expert-Comptable") and is a certified German tax adviser (Steuerberater). He holds a post-graduate degree in Luxembourg Tax and a degree in Business Administration with a major in Tax from the University of Applied Sciences of Trier, Germany.

He speaks German, English and French.

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