Special purpose vehicle (SPV),
Definition of Special purpose vehicle (SPV):
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.
For this reason, a special purpose vehicle is sometimes called a bankruptcy-remote entity.
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?
- It may be used to undertake a risky venture while reducing any negative financial impact upon the parent company and its investors.
- An SPV is created as a separate company with its own balance sheet.
- Alternately, the SPV may be a holding company for the securitization of debt.
Meaning of Special purpose vehicle (SPV) & Special purpose vehicle (SPV) Definition