abhishreshthaa
Abhijeet S
SPECIAL PURPOSE VEHICLE
The function of SPV in securitization transaction could stretch from being a pure conduit or intermediary vehicle, to a more active role in reinvesting or reshaping the cash flows arising form the assets transferred to it, which is something that would depend on the end objectives of the securitisation exercise.
WHY SPECIAL PURPOSE VEHICLE
The SPV is brought in as an intermediary to hold the receivables that the originator transfers. If there was one originator and a single purchaser of the receivables, the SPV was not required.
The SPV is like a body corporate (not necessarily incorporated) – the investors hold an undivided interest in the SPV and the SPV in turn holds interest in the pool of receivables.
No investor is a direct legal owner of the pool; the investors are however beneficial owners of the undivided pool and all of them collectively become the beneficial owner of the whole of the receivables.
The function of SPV in securitization transaction could stretch from being a pure conduit or intermediary vehicle, to a more active role in reinvesting or reshaping the cash flows arising form the assets transferred to it, which is something that would depend on the end objectives of the securitisation exercise.
WHY SPECIAL PURPOSE VEHICLE
The SPV is brought in as an intermediary to hold the receivables that the originator transfers. If there was one originator and a single purchaser of the receivables, the SPV was not required.
The SPV is like a body corporate (not necessarily incorporated) – the investors hold an undivided interest in the SPV and the SPV in turn holds interest in the pool of receivables.
No investor is a direct legal owner of the pool; the investors are however beneficial owners of the undivided pool and all of them collectively become the beneficial owner of the whole of the receivables.