Special Purpose Vehicle

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Special Purpose Vehicle

A subsidiary of a company that attempts to isolate risk from the parent company by maintaining its assets and liabilities on a completely separate balance sheet. It can be used as a counterparty in swap transactions, or the parent company can finance a project through an SPV that would put the parent company in danger of bankruptcy if the project does not perform well. During the Enron scandal, SPVs developed notoriety because Enron hid much of its debt in SPVs.
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References in periodicals archive ?
There are limitations to using the cash method--among them, if you're a corporation with over $5 million of gross receipts or a partnership with a special purpose entity as a partner.
The bank advises A that it will make the loan only to a special purpose entity (e.g., a corporation) that must buy and own the replacement property.
The bank has formed Fortified Trust, a special purpose entity to purchase 'undivided co-ownership interests in a revolving pool of receivables generated in certain real estate secured line of credit accounts from the bank and fund that purchase via the sale of asset-backed securities to institutional and retail investors.'
Charles Zhang, the company's chairman and chief executive officer, for an investment by a special purpose entity to be formed by Zhang and a third-party private equity firm to be identified by him.
The notes have been issued by a special purpose entity, ADIB Sukuk Company Limited, which is incorporated in the Cayman Islands.
Summary: NBE last week began marketing dollar-denominated bonds it is issuing through a fully owned special purpose entity.
Specifically, this rule change calls for the elimination of the concept of a "qualified special purpose entity" (QSPE), which allowed banks to securitize commercial real estate loans and to keep these investments off their balance sheets.
Unlike forward exchanges, in which qualified intermediaries typically don't take title to the property, in a reverse exchange the EAT must hold legal title to the replacement property, either directly or through a special purpose entity such as a single-member LLC.
One of the problems is we don't have a good definition for what constitutes a special purpose entity. Some have even said, "I don't know what makes an SPE so special."
Either the transferee has the right to pledge or exchange the transferred assets, or the transferee is a qualifying special purpose entity. The final statement expands the first condition to make it clear it's really whether the transferee retains the right free of conditions that may constrain it from taking advantage of that right.
(through its special purpose entity, NTJ Holdings 1 Ltd.) is expected to close on or about 14 April 2017.
Standard Chartered Saadiq Berhad and CIMB Investment Bank Berhad acted as the joint lead arrangers for the sukuk MTN programme, which is based on the Shariah principle of Wakalah and will be executed via a special purpose entity, Gulf Sukuk I Company BSC, GIB said.

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