Usual Luxembourg security package

Luxembourg is one of the leading domiciles worldwide for international investment portfolio acquisition vehicles.

Acquisition financing are usually secured against the assets and cash flows of the target company as well as of the buyout vehicle.

In practice, given that a Luxembourg holding company generally does not have any operational activities, shares, receivables and cash on bank are the most important assets to cover.

Yesterday, Dexia S.A., a European bank that was rescued by the French and Belgian governments in September 2008, announced that it would no longer rely on state guarantees for future funding. All debt instruments issued prior to June 30, 2010 will remain guaranteed by the government pursuant to their terms.

Today, the FDIC announced that Colony Capital Acquisitions, LLC paid a total of approximately $90.5 million (net of working capital) in cash for a 40% equity stake in a limited liability company (LLC) created by the FDIC to hold a portfolio of approximately 1,200 distressed commercial real estate loans with an aggregate unpaid principal balance of $1.02 billion arising out of 22 failed bank receiverships.

Today, the Government Accountability Office (GAO) released a report entitled, “Fannie Mae and Freddie Mac: Analysis of Options for Revising the Housing Enterprises’ Long-term Structures.” Last September, the Federal Housing Finance Agency placed the GSEs into conservatorship fearing that their deterioration would harm U.S. financial stability.

Today, the FDIC announced the next steps in further developing the government's Legacy Loan Program (LLP), by testing the LLP program's funding mechanism through the sale of a portfolio of residential mortgage loan receivership assets to a limited liability company (LLC) in exchange for an ownership interest in the LLC.

Last week, the European Commission (EC) announced that it has decided to further review Dexia’s restructuring plan under EC Treaty state aid rules to “establish whether the restructuring plan for the Dexia group will restore the group's long-term viability.” The plan includes a €6.4 billion capital injection, announced in

On July 28, 2008, the FDIC published a Notice of Proposed Rulemaking in the Federal Register seeking to establish recordkeeping requirements for qualified financial contracts (“QFCs”) held by banks in “troubled” condition. The purpose of the Proposed Rule is to enable the FDIC, upon receivership, to make expeditious and well-informed decisions with respect to the management of a failed bank’s QFC portfolio.