Special Purpose Vehicle (SPV) or Special Purpose Entity (SPE)

An entity established for a particular purpose, such as obtaining off-balance sheet financing, gaining tax advantages, or isolating the sponsors' other assets from the project's creditors, for example in the case of project finance. Frequently, SPVs or SPEs serve as conduits or pass through organizations or corporations. In relation to securitisation, it means the entity which would hold the legal rights over the assets transferred by the originator. Then it is a finite-lived, standalone financing vehicle used to hold the assets underlying a structured finance transaction