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Quantitative Finance · Glossary

What is Securitisation, special-purpose vehicle?

Also known as: securitisation · special-purpose vehicle

Definition 25.2 Markets II: Rates, FX and Credit · Chapter 25 — Loans, CLOs and Securitisation

Securitisation is the pooling of loans or other financial assets and the sale of claims on their cash flows as securities. A special-purpose vehicle (SPV) is a company set up only to hold the pool and issue the securities, so that the pool is separate from whoever originated or sold the assets and the investors’ claims depend only on it.

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