Synthetic Debt SPV

Definition

Synthetic Debt SPV. A Special Purpose Vehicle set up for the issuance of synthetics CDOs. This entity (like all SPVs) its itself registered as some kind of legal entity, distinct from the sponsoring organization. It becomes the Issuer of Synthetic CDO issues.

Issues and Challenges

REVIEW: Whether this is (or is ever) a separate SPV for Synthetics, as it is for Cash CDO and other Cash structured finance. If not, how to define the facts at the level of SPV without contradictions. Moving stuff off the balance sheet is involved in putting it into the SPV. So talking a bout balance sheet or off balanc sheet, this is about creating the pool which is going to be sold off. This applies whether hte pool is cash (real holdings) or synthetics. Either way ,the instruments are transferred into the CPV to sell them off. conclusion: applies to cash and non cash. In the old days there were all sorts of guarantees added to that SPOV. Now if you provide support to that =SPV it is no longer "Off balance sheet" froma regulatory point of view. Accounting rules refer.

Disclaimer

This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with, or correctly interprets, the concepts covered by the FIBO ontology.