Special Purpose Vehicle-SPV
Also called "Special Purpose Entity-SPE," it is a subsidiary company, which serves as counterparty for swaps and other derivatives.
SPV also refers to entity with operations limited to acquisitions and financing. This is a subsidiary company, with such legal status that makes its obligations safe, even if the parent company defaults. Therefore, Special Purpose Vehicle is sometimes called "bankruptcy remote entity."
Special Purpose Vehicles are used for financing large projects, while avoiding the risk on the entire company level, focusing it to subsidiary company.
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