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 green investment bonds. We have based our strategy on the following cornerstones.
Lux Eco Securities has structured its bonds in such a way that the principal capital is collateralized with income-producing assets with a fast-accelerating asset value and a significant upside value potential. Most of these assets are about to make a breakthrough in global markets owing to established supplier partnerships with multinationals. Some of these assets are already targets for acquisition or qualify for IPOs. We only acquire assets from countries with highly developed environmental standards, innovative regulatory framework, sophisticated legal systems and strong contract enforcement standards. The investments are secured by high quality assets worth several times the amount of the investor’s bond investment.
Additional collateral is provided through securitization of the committed revenue streams, mostly originated from high creditworthy multinationals and on the basis of multi-year off-take contracts as well as collateralized financial securities like receivables, letters of credit, state export guarantees, bank guarantees, credit insurance and the cash positions held. On most occasions, additional collateral is provided in the form of state subsidies, grants, and tax-incentives as well as intangible assets like patents, licenses, etc.
The aggregate collateral value is therefore always no less than 100% of the equivalent face value of the bond principal. The assets remain throughout the whole investment period in a dedicated legal structure (compartment) under the control of an independent security trustee to ensure no other creditors but the investors have a claim on them and to safeguard that the proceeds are utilized with first priority to reimburse the principal and pay interest obligation to the bondholders.
Lux Eco Securities provides substantially higher coupon rates than other investment grade instruments, especially over longer tenures. Our income strategy is straightforward: we invest in income producing assets with fast accelerating asset value and significant upside value potential. As we dispose of these assets and capitalize the gains relatively fast, we are able to reinvest in new assets and roll-over the capital and compound returns several times within the bond investment period.
With our green bonds, we offer investors an alternative to low-yield returns that money market and investment-grade securities offer and the high risks involved with stocks, commodities, and currencies as well as most mutual funds. The yields of these securities tend to be rather volatile and strongly correlated to unpredictable market risks and other contingencies.
In addition to the high fixed coupon, we grant the bondholder an extra bonus. Lux Eco Securities will determine at maturity the net value of the assets that remain after the bond principal has been fully reimbursed and interest obligations have been paid in full. Bondholders can benefit from an attractive exit bonus of up to 10% of the net asset value.
Lux Eco Securities only invests in assets that are already producing income. The income is largely originated from long term contracts with reputable global corporations with an indisputable credit-rating.
The payments are often secured by financial securities like credit-insurance, state export guaranties, off-take contracts, cash-backed bank guarantees, letters of credit, promissory notes, etc.
These securities have a fixed value, can be rapidly turned into cash assets, and can be factored or discounted in case of emergencies. While there is a theoretical credit risk, it is fully recoverable.
Lux Eco Securities invests only in assets that constitute proven technologies, certified, accepted, and deployed by industry leaders, under fully executed preferred supplier agreements.
The focus is on relatively low CAPEX and OPEX assets, with long economic and technical lifetimes and short pay-back terms. In general, these assets can be rapidly and easily re-financed by bank loans, sold, and leased back to ensure short investment periods and high-gear cash flows in the portfolio. All assets will be properly insured by insurance providers with a minimum A-rating.
Inherent to the market acceptance of green emerging technologies, i.e. hydrogen powered vehicles, the market demand and the offtake prove in the early stages to grow exponentially.
These technologies are therefore largely non-correlated to global macro-economic developments and i.e. commodity market volatility. Profit margins and asset values however tend to increase as economies of scale kick in.
As the currency of the bond principal and the asset in which we invest are the same the bondholders are not exposed to the volatile currency exchange rates and unexpected currency exchange losses.
We herewith avoid the exorbitant costs associated with hedging and “stop loss” strategies.
Lux Eco Securities values solvency (in the sense of liquidity sufficiency) 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 the cost of servicing the assets we have in our portfolio without risking liquidity shortage.
We plan to strategically time asset disposals throughout the entire investment period and in particular for liquidity sufficiency at bond maturity date. We consider liquidity risk management of significant importance. We have therefore installed a continuous liquidity audit procedure whereby the risk advisor provides on a regular base a certificate of liquidity sufficiency.
Being situated in one of the largest and most professional financial centers, our undertaking is subject to the provisions of the applicable securities acts. We ensure we comply with the latest global accounting standards and regulatory and statutory reporting requirements. 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 Eco Securities strives to be fully accountable for its results. We assume all potential risks ourselves, transferring them solely to our shareholders and not to our investors. Net retained earnings are distributed to shareholders only after the principal and interest has been paid in full to the bondholders. There are no hidden costs, commissions, or deductions from the invested capital, nor do we take a share of the investors’ returns upon success. In fact, we share net earnings from the investments with our bondholders, ensuring not only our accountability but also our integrity.
Lux Eco Securities is a true financial innovator. Besides our unique investment and risk management strategies, our innovation efforts have caused a major shift in the approach to funding of lux eco securities.
