News

< Back

10 October 2023

Securitisation - Orphan Entity - Special Purpose Vehicle

Special Purpose Vehicle and Orphan Status

The SPV issuer of the Note is part of an “orphan structure” when its ownership is structured in such a way that the SPV is not affiliated with the Originator or any of its group anymore. This is to ensure “true sale” treatment and independence

 

The orphan structure for the SPV is achieved by utilizing the Trust as the ultimate beneficial owner of the SPV. This protect the Investors in case of the Originator’s insolvency enhancing the “bankruptcy remote” status of such securitisation structure.

 

Securitisation of Underlying Assets that do not meet such criteria may be deemed being re-characterised just as a simple secured loans and therefore vulnerable to attack or avoidance in any subsequent insolvency of the Originator.

 

To achieve orphan status, the shareholder of the Luxembourg SPV is a Trust controlled by a independent corporate trustee for and on behalf of a charity or a person which is not linked to anyone in the transaction.

 

The directors of the SPV are often independent from the Originator. Such board of director has very few decision to take as the parameters of the transaction are set out from the origin in the contractual arrangements .

 

Once the transaction is terminated, the Notes are paid out and the SPV is wound-up and the remaining assets (usually a very little nominal amount) are distributed to the Trust as the sole shareholder. Those assets are then distributed in turn to a designated charity under terms of the deed governing the Trust. Any surplus is generally distributed to charity whether the Trust is established specifically as charitable trust or just a purpose trust.

 

 

 

To Find out more how we can help you setup your Securitisation Vehicule , contact us here

 

Talk to an expert

Speak to our in-house experts for trusted unbiased advice about the incorporation and admin of funds

Contact Us

Publications

News

Latest news

See all news

Contact Us

To help us to understand your project better and to respond adequately to your request in the fastest way, please let us know more about the structure you wish to put in place:

Step 1.

Is your request about one of the following services:

Step 2.

Step 3.

Step 4.

Investor(s)

Step 5.

Submit your details

One of our advisors will be in contact to discuss your requirements in further detail.






All your personal information will strictly be used by Creatrust for professional purposes. To access, modify, rectify and delete your data, please contact Creatrust at: 2C, Parc d’Activités – L-8308 Capellen - G.D. Luxembourg