Jurisdiction(s):
United Kingdom

Key definition

Special purpose vehicle definition

What does Special purpose vehicle mean? An SPV is an entity created to carry out a narrowly defined transaction, hold specified assets or ring‑fence risk for a project. It separates assets and liabilities from the sponsor group, often with limited recourse and non‑petition covenants to support bankruptcy remoteness. The term is descriptive rather than statutory, though securitisation law uses “securitisation special purpose entity” (SSPE). SPVs are used in securitisation and structured finance, project finance, real estate and IP holding, and pension scheme funding. In contingent asset or asset‑backed contribution arrangements, an employer may transfer assets to an SPV that lends back or grants income rights on agreed...

UK collateralised debt obligations: structures and parties; portfolio management, capital structure and hedging; key legal, tax, credit enhancement and regulatory issues under the UK securitisation regime

Published by a LexisNexis Financial Services expert

Practice notes

This Practice Note outlines collateralised debt obligations (CDOs) and the relevant UK regulatory regime. It addresses:

fundamentals such as Special purpose vehicles (SPVs), securitisation, tranches, and creating security over a portfolio of financial assets, which may include asset-backed Securities (ABS), mortgage-backed securities (MBS) and other issues of CDO securities
the key participants in a CDO transaction (arranger, portfolio manager, rating agencies, issuer and investors)
the principal CDO structures (cash flow CDO, market value CDO and synthetic CDO)
the main portfolio management approaches (dynamic and static)
the capital structure of SPVs used for CDO transactions
the role of hedging in CDO structures
key considerations and legal issues for CDOs (bankruptcy remoteness, methods of transferring the underlying assets to the SPV, jurisdiction and tax issues, credit enhancement and overcollateralisation)

What is a CDO? Core concepts

Collateralised debt obligations (CDOs) are intricate, high-value arrangements involving many parties, extensive documentation and, commonly, multiple jurisdictions. A CDO transaction involves an orphan shell company (a special purpose vehicle (SPV) established by the investment bank Arranging the CDO transaction) issuing newly created structured finance instruments (being...

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Web page updated on 22/05/2026

Popular documents

Using the Judicial College Guidelines to assess general damages in personal injury claims

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

Tomlin orders in England and Wales: CPR guidance on drafting, confidentiality, approval, variation, enforcement, limitation, CCA issues, court-specific requirements, sample wording and precedents

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Precedent: Deed of Surrender of Lease with Optional Premium, Settlement and Release, Landlord, Mortgagee and Guarantor Consents, Reimbursement and HM Land Registry Provisions (England and Wales)

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

Precedent Statutory Declaration: Standard Wording under the Statutory Declarations Act 1835

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...