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The Use of SPVs in Asset Securitizations

The Wilmington Trust Equipment and Transportation Finance Team |
Corporate & Institutional
SPV-in-AS-NC.jpg

A special purpose vehicle (SPV) is created to carry out a specific business purpose or activity. SPVs are frequently used in structured finance transactions, such as in asset securitizations, joint ventures, or to isolate certain company assets or operations. SPVs can be created through a variety of entities, such as trusts, corporations, limited partnerships, and limited liability corporations.SPVs are used by many companies for an array of financing purposes.

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Role of the Trustee in Asset Securitization

Corporate & Institutional
Cleveland, Ohio, USA: Howard M. Metzenbaum U.S. Courthouse and post office - houses the Bankruptcy Court, the US Trustee and US Marshals - 201 Superior Avenue - architects Arnold W.Brunner and Daniel Chester French - Beaux-Arts architecture - photo by M.Torres

Asset securitization segregates the assets to be securitized from the business of the securitization’s sponsor (the Originator) by transferring them to a special purpose vehicle (SPV), often a trust. The trustee of the trust usually subcontracts the administration and servicing of the securitized assets back to a subsidiary of the originator of the asset pool or a third-party provider.

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