What is the purpose of a Special Purpose Vehicle (SPV) in a financing transaction?
The purpose of a Special Purpose Vehicle (SPV) is to segregate the liabilities and assets associated with a particular financing transaction from the liabilities and assets of its founding person. It is used specifically for transactions involving credit, borrowing, securitization, bond issuance, and transfer of risks associated with insurance, reinsurance, and derivatives transactions in accordance with the provisions of the decision of the Securities and Commodities Authority (SCA) regulating such activities.