LuxCSD successfully handled issuance of second Luxembourg government bond


The second Luxembourg government bond was successfully issued through LuxCSD. The bond with a notional amount of 2 billion Euro and a 10 year tenor was launched into the primary markets on 2 July 2013. On settlement date, the 10 July 2013, LuxCSD successfully handled the DVP settlement in Euro central bank money.

International investors had full access to the launched Luxembourg government bond and were able to benefit from the high quality bond issuance services offered by LuxCSD and its partner banks.

“Through LuxCSD’s international-grade issuance and Euro central bank money settlement services, the CSD was able to provide domestic and international investors with a flawless bond investment service and the Luxembourg government with fast access to the capital it sought to raise. Supporting this issuance is a further reference for LuxCSD in fulfilling its mandate to strengthen the Luxembourg financial place as efficient issuance and distribution hub in Euro central bank money“, said Patrick Georg, LuxCSD’s General Manager.

LuxCSD is based on the competence of its founding shareholders bringing each respectively their expertise in risk free central bank money and cross-border securities processing to the venture. The CSD fully supports dematerialised securities as these will significantly reduce inefficiencies, risks and costs for the industry.

About LuxCSD

LuxCSD is jointly (50/50) owned by the Banque centrale du Luxembourg (BCL) and Clearstream International S.A. LuxCSD offers custodians and distributors across Europe excellent custody and added value services built on a highly efficient settlement process with access to many counterparties. Settlement of securities transactions in central bank money reduces risk for financial market participants.

The company was created in July 2010 within the context of the future implementation of the Eurosystem’s TARGET2-Securities (T2S) initiative. LuxCSD will provide the Luxembourg financial market infrastructure with a national access point to T2S and so will enable Luxembourg market participants to reduce their settlement risks as delivery versus payment (DVP) settlement in central bank money is widely recognised as the safest way to achieve securities settlement. This is an important factor in helping the Luxembourg market to remain competitive as a financial centre once the new European settlement infrastructure is established.

Following completion of its technical implementation in September 2011, LuxCSD was designated a Securities Settlement System by the Luxembourg central bank in October 2011. This is a requirement to operate under the protection of the Settlement Finality Directive and LuxCSD has been fully operational since then. The company’s commitment in May 2012 to join TARGET2-Securities marked another milestone in the young life of the Luxembourg CSD. In March 2013, LuxCSD has received approval by the European Central Bank (ECB) for its Securities Settlement System (SSS) being eligible for use in the collateralisation Eurosystem credit operations.