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Bibframe Work

Title
Special purpose vehicles and securitization Special purpose vehicles and securitization
Type
Text
Genre Form
electronic resource
Language
English
Classification
LCC: HB1 (Source: dlc)
Identified By
Lccn: 2005616950
Summary
"Firms can finance themselves on- or off-balance sheet. Off-balance sheet financing involves transferring assets to "special purpose vehicles" (SPVs), following accounting and regulatory rules that circumscribe relations between the sponsoring firm and the SPVs. SPVs are carefully designed to avoid bankruptcy. If the firm's bankruptcy costs are high, off-balance sheet financing can be advantageous, especially for sponsoring firms that are risky. In a repeated SPV game, firms can "commit" to subsidize or "bail out" their SPVs when the SPV would otherwise not honor its debt commitments. Investors in SPVs know that, despite legal and accounting restrictions to the contrary, SPV sponsors can bail out their SPVs if there is the need. We find evidence consistent with these predictions using data on credit card securitizations"--National Bureau of Economic Research web site.
Authorized Access Point
Gorton, Gary. Special purpose vehicles and securitization
Authorized Access Point Variant
Souleles, Nicholas S. Special purpose vehicles and securitization
National Bureau of Economic Research. Special purpose vehicles and securitization