A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
SPV
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| - | Abbreviation of Special Purpose Vehicle. Sometimes referred to as a Special Purpose Entity (SPE). SPVs are entities created for a specific, limited and sometimes temporary purpose. They are often limited companies or partnerships whose purpose is to isolate another company from financial [[Risk|risk]]. SPVs are often used in the [[Securitization|securitization]] of loans or other instruments. For example, a bank may issue a mortgage-backed security ([[MBS]]), the income from which is derived from repayments from a pool of mortgage loans. The bank may wish to legally separate itself from the loans and does so by setting up an SPV and transferring the loans to it. Companies may also use SPVs to hold [[Debt|debt]] used for project finance or other purposed [[Off Balance Sheet|off balance sheet]]. | + | Abbreviation of Special Purpose Vehicle. Sometimes referred to as a Special Purpose Entity (SPE). SPVs are entities created for a specific, limited and sometimes temporary purpose. They are often limited companies or partnerships whose purpose is to isolate another company from financial [[Risk|risk]]. SPVs are often used in the [[Securitization|securitization]] of loans or other instruments. For example, a bank may issue a mortgage-backed security ([[MBS]]), the income from which is derived from repayments from a pool of mortgage loans. The bank may wish to legally separate itself from the loans and does so by setting up an SPV and transferring the loans to it. Companies may also use SPVs to hold [[Debt|debt]] used for project finance or other purposes [[Off Balance Sheet|off balance sheet]]. |
Revision as of 12:59, 24 April 2010
Abbreviation of Special Purpose Vehicle. Sometimes referred to as a Special Purpose Entity (SPE). SPVs are entities created for a specific, limited and sometimes temporary purpose. They are often limited companies or partnerships whose purpose is to isolate another company from financial risk. SPVs are often used in the securitization of loans or other instruments. For example, a bank may issue a mortgage-backed security (MBS), the income from which is derived from repayments from a pool of mortgage loans. The bank may wish to legally separate itself from the loans and does so by setting up an SPV and transferring the loans to it. Companies may also use SPVs to hold debt used for project finance or other purposes off balance sheet.