Special purpose vehicle (SPV)

Special purpose vehicle (SPV),

Definition of Special purpose vehicle (SPV):

  1. A special purpose vehicle, also called a special purpose entity (SPE), is a subsidiary created by a parent company to isolate financial risk. Its legal status as a separate company makes its obligations secure even if the parent company goes bankrupt.

  2. For this reason, a special purpose vehicle is sometimes called a bankruptcy-remote entity.

  3. A legal entity created solely to serve a particular function, such as the facilitation of a financial arrangement or creation of a financial instrument. See also special purpose corporation.

How to use Special purpose vehicle (SPV) in a sentence?

  1. It may be used to undertake a risky venture while reducing any negative financial impact upon the parent company and its investors.
  2. An SPV is created as a separate company with its own balance sheet.
  3. Alternately, the SPV may be a holding company for the securitization of debt.

Meaning of Special purpose vehicle (SPV) & Special purpose vehicle (SPV) Definition