Strategic Intent - About us - Lux Infra Investments

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.

True Securitization

Lux Infra Investments has structured its bonds in such way that the principal capital is collateralized with income-producing assets with a fast accelerating asset value and a significant upside value potential. These assets are vital to the international trade system and situated at major hubs of the global transport system. The assets are constructed by reputable interational developers and operated by multinationals. We develop such assets only in countries with highly developed environmental standards, innovative regulatory framework, sophistcated legal systems and strong contract enforcement standards. In emerging and developing markets the investments are collateralized by high quality securities like state and bank guarantees with a value of several mutiples of the invested bond principal.

Additional collateral is provided through securitiztion of the committed revenue streams, mostly originated from high creditworthy multinationals and on basis of multi-year off-take contracts as well as collateralized financial securities are receivables, letters of credit, state export guarantees, bank guarantees, credit insurance. In most occassions additional collateral is provided in the format of state subsidies, grants and investment and tax-incentives as well as intangible assets like the patents, licenses, etc.

The aggreate collateral value is therfore 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 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.

High Fixed Income

Lux Infra Investments provides substantially higher coupon rates than other investment grade instruments,in particular over longer tenures. We do not make a secret of our income strategy. We simply invest in income producing assets with fast acceerating 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 a most mutual funds The yields of these securities tend to be rather volatile and strongly correlated to unpredictable market risks and other contingencies.

Credit/Market Risk

Lux Infra Investments invests only in incoming producing assets. 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 guaranties, letters of credit, promissory notes, etc.. These securities have a fixed value, are rapidly turned into cash and in case of emergency factored or discounted. The credit risk exists of course theoretically, but any loss is fully recoverable.

We invest only in high quality assets with proven technologies build by accredited developers, under fully collateralized agreements. The focus is on relatively low CAPEX and OPEX assets, with long economic and technical life time and with short pay-back terms. In general these assets can be rapidly and easily re-financed by bank loans, sell and lease back to ensure short investment periods and high gear cash flows in the portfolio. All assets will be properly insured by insurance providers with minimum A-rating.

Inherent to the market acceptance the market demand in the early stages is expected to grow exponential. The income and value 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 curency exchange rates and unexpected currency exchange losses. We herewith avoid also the exorbitant cost for hedging and “stop loss” strategies.

Optimal Liquidity

Lux Infra Investments 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 cost of servicing of the assets we have in portfolio without risking liquidity shortage. We plan for optimal spread of timely asset disposals across the entire investment period and in particular for liquidity sufficiency at bond maturity date. We considers liquidity risk management of significant importance. We have therefore installed a continuous liquidity audit procedure.

Accountability

Being situated in one of the largest and most professional centers, our undertaking is subject to the provisions of the Securitization Act 2004 of Luxembourg. We ensure we comply with the latest global accounting standards and the regulatory and statutory reporting requirements of the Luxembourg authorities. We provide timely and accurate accounting reports to our investors and all other stakeholders. We apply only global accounting methodologies and our books require approval of external auditors. 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 Infra Investments strives to be fully accountable for results. We do not defer any of the potential risk to our investor’ but only to our shareholders. Net retained earnings are distributed to shareholders only after the principal and interest has been paid in full to the bondholders. There are no commissions and costs at the expense of our bondholder’ interest or deducted from the principal invested capital, nor do we claim a share of the investor;s returns upon success. In fact,we share the excess net earnings deriving from the investments with our bondholders. Herewith is not just our accountability guaranteed but also our integrity.