Special Purpose Vehicle/Entity - SPV/SPE
- Special Purpose Vehicle/Entity - SPV/SPE
- 1. Also referred to as a "bankruptcy-remote entity" whose operations are limited to the acquisition and financing of specific assets. The SPV is usually a subsidiary company with an asset/liability structure and legal status that makes its obligations secure even if the parent company goes bankrupt.
2. A subsidiary corporation designed to serve as a counterparty for swaps and other credit sensitive derivative instruments. Also called a "derivatives product company."
Thanks to Enron, SPVs/SPEs are household words. These entities aren't all bad though. They were originally (and still are) used to isolate financial risk.
A corporation can use such a vehicle to finance a large project without putting the entire firm at risk. Problem is, due to accounting loopholes, these vehicles became a way for CFOs to hide debt. Essentially, it looks like the company doesn't have a liability when they really do. As we saw with the Enron bankruptcy, if things go wrong, the results can be devastating.
Investment dictionary.
Academic.
2012.
Look at other dictionaries:
special purpose vehicle — special purpose entity ( SPE); special purpose vehicle ( SPV) A legal entity, sometimes a trust or a limited partnership, that is created solely for the purpose of holding assets. (1) The SPV may be used to obtain off balance sheet funding by… … Financial and business terms
Special Purpose Vehicle — Als Zweckgesellschaft, engl.: Special Purpose Vehicle (SPV) oder Special Purpose Entity (SPE) wird eine juristische Person bezeichnet, die für einen klar definierten und eingegrenzten Zweck gegründet wird.[1] Nach Erreichen ihres Zwecks kann die… … Deutsch Wikipedia
special purpose entity — ( SPE); special purpose vehicle ( SPV) A legal entity, sometimes a trust or a limited partnership, that is created solely for the purpose of holding assets. (1) The SPV may be used to obtain off balance sheet funding by obtaining secured loans… … Financial and business terms
special purpose entity — + special purpose entity (SPE) USA Also known as bankruptcy remote entity, single purpose entity, special purpose vehicle and SPV. An entity formed to develo … Law dictionary
Special purpose entity — A special purpose entity (SPE) (sometimes, especially in Europe, special purpose vehicle or simply SPV) is a body corporate (usually a limited company of some type or, sometimes, a limited partnership) created to fulfill narrow, specific or… … Wikipedia
Special Purpose Entity — Als Zweckgesellschaft, engl.: Special Purpose Vehicle (SPV) oder Special Purpose Entity (SPE) wird eine juristische Person bezeichnet, die für einen klar definierten und eingegrenzten Zweck gegründet wird.[1] Nach Erreichen ihres Zwecks kann die… … Deutsch Wikipedia
Special Purpose Company — Als Zweckgesellschaft, engl.: Special Purpose Vehicle (SPV) oder Special Purpose Entity (SPE) wird eine juristische Person bezeichnet, die für einen klar definierten und eingegrenzten Zweck gegründet wird.[1] Nach Erreichen ihres Zwecks kann die… … Deutsch Wikipedia
SPE — special purpose entity (SPE); special purpose vehicle ( SPV) A legal entity, sometimes a trust or a limited partnership, that is created solely for the purpose of holding assets. (1) The SPV may be used to obtain off balance sheet funding by… … Financial and business terms
SPV — special purpose entity ( SPE); special purpose vehicle (SPV) A legal entity, sometimes a trust or a limited partnership, that is created solely for the purpose of holding assets. (1) The SPV may be used to obtain off balance sheet funding by… … Financial and business terms
SPE — + special purpose entity (SPE) USA Also known as bankruptcy remote entity, single purpose entity, special purpose vehicle and SPV. An entity formed to develo … Law dictionary
