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Special Purpose Vehicle

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Presentation on theme: "Special Purpose Vehicle"— Presentation transcript:

1 Special Purpose Vehicle

2 Venture capital - Alternatives
Offshore funding is provided via specialist venture capital trusts, which seek to utilise securitization in structuring hybrid multi-market transactions via an SPV (special purpose vehicle): a corporate entity that is designed solely for the purpose of the financing.

3 Ecotax - Registration taxes
In the Netherlands, the new registration taxes, payable when a car is sold to its first buyer, can earn the owner of a hybrid a discount up to €6000. Spain reduced taxes for cars that produced less CO2 (some of which will be exempted), while the more consuming, like Special purpose vehicle|SPV and Four-wheel drive|4WD saw their taxes increased.

4 Autogas - Turkey According to the Turkish Statistics Institute’s report, the nation had over 16,500,000 vehicles in January % are passenger vehicles. 16.2% light weight trucks, 15.7% motorcycles, 9.2% tractors, 4.6% heavy weight trucks, 2.5% mini buses for transportation, 1.4% buses and 0.1% special purpose vehicles.

5 Contemporary era - Great Recession
The European Financial Stability Facility (EFSF) was a special purpose vehicle financed by members of the eurozone to combat the European sovereign debt crisis

6 Private finance initiative - Contracts
A public sector authority signs a contract with a private sector consortium, technically known as a Special purpose entity|Special Purpose Vehicle (SPV)

7 Ecolabelling - Canada EnerGuide label for vehicles found on all new passenger cars, light-duty vans, pickup trucks and special purpose vehicles not exceeding a gross vehicle weight of 3855kg (8500lb). The label shows the city and highway fuel consumption ratings and an estimated annual fuel cost for that particular vehicle.

8 Public private partnership
Typically, a public sector consortium forms a special company called a special purpose vehicle (SPV) to develop, build, maintain and operate the asset for the contracted period.Zheng, J

9 Motor vehicle type approval
The European Commission shall adopt amendments to this Directive which are necessary to wikt:lay down|lay down technical requirements for small series vehicles, vehicles approved under the individual approval procedure and 'special purpose vehicles'.

10 Tobashi scheme - Structure
The scheme often makes use of off-balance sheet|off-balance sheet financing or special purpose entity|Special purpose vehicles with non-coterminous accounting periods

11 Driving in Singapore - Seating etiquette in cars
In Singapore, only right hand drive cars are allowed. There are exceptions for special purpose vehicles, diplomatic vehicles and foreign registered vehicles driven by visitors, with the label placed at the back windscreen of the vehicles indicating Left Hand Drive to alert other motorist that the driver's seat is on the left side instead of on the right side.

12 High-speed rail in India - History
(RVNL), a special purpose vehicle that carries out the construction works for Indian Railways. It will handle tendering, pre-feasibility studies, awarding contracts and execution of the projects. The corporation will comprise four members, all of whom will be railway officials. All high-speed rail lines will be implemented through PPP mode on a Design, Build, Finance, Operate and Transfer (DBFOT) basis. The corporation was officially formed on 29 October 2013.[ The HSRC will co-exist with the High-Speed Rail Authority of India (HSRA)

13 TAFE - Tractors and Farm Equipment Limited - History
TAFE acquired Eicher tractor|Eicher tractors in 2005 through a special purpose vehicle, TAFE Motors and Tractors Limited (TMTL), which is a wholly owned subsidiary. It has major presence in a number of Indian states like Rajasthan, Gujarat, Andhra Pradesh, Karnataka, Madhya pradesh and Uttar pradesh.

14 Steel Authority of India Limited - International Coal Ventures Private Limited
International Coal Ventures Private Limited is a special purpose vehicle set up to achieve the target of making steel PSUs self-reliant in the area of coking coal, a joint venture company has been incorporated composed of five central PSU companies i.e. SAIL, Rashtriya Ispat Nigam Limited (RINL), Coal India Limited and other target countries.

15 Mortgage-backed security - Securitization
# Mortgage loans (mortgage notes) are purchased from banks and other lenders, and possibly assignment (law)|assigned to a special purpose vehicle (SPV).

16 Credit default swap In addition to corporations and governments, the reference entity can include a special purpose vehicle issuing Asset-backed security|asset-backed securities.

17 American International Group - Financial crisis
The U.S. Department of The Treasury in December 2012 published an itemized list of the loans, stock purchases, special purpose vehicles (SPVs) and other investments engaged in with AIG, the amount AIG paid back and the positive return on the loans and investments to the government.

18 Olympus scandal - Questionable acquisitions
Seventeen Cayman and BVI special purpose vehicles were used to make payments; funds flowed through Commerzbank AG, Societe Generale SA and LGT Bank.Yamaguchi, Yuki and Yasu, Mariko (13 December 2011)

19 Chartis - History On July 27, 2009, AIG announced it intended to form a Special Purpose Vehicle (SPV) for Commercial Insurance, Foreign General and the Private Client Group which would be placed into the SPV and renamed Chartis in preparation for an IPO or other equity offer

20 Gillian Tett She has written about the financial instruments that were part of the cause of the financial crisis that started in the fourth quarter of 2007, such as Collateralized debt obligation|CDOs, credit default swaps, Structured investment vehicle|SIVs, Real Estate Mortgage Investment Conduit|conduits, and Special purpose vehicle|SPVs

21 Securitization - Pooling and transfer
A suitably large portfolio of assets is pooled and transferred to a 'special purpose vehicle' or 'SPV' (the 'issuer'), a tax-exempt company or trust formed for the specific purpose of funding the assets

22 Securitization - Servicing
A 'servicer' collects payments and monitors the assets that are the crux of the structured financial deal. The servicer can often be the originator, because the servicer needs very similar expertise to the originator and would want to ensure that loan repayments are paid to the Special Purpose Vehicle.

23 Special purpose vehicle
A 'special purpose entity' ('SPE'; or, in Europe and India, 'special purpose vehicle'/'SPV', or, in some cases in each EU jurisdiction ndash; FVC financial vehicle corporation) is a legal entity (usually a company (law)|limited company of some type or, sometimes, a limited partnership) created to fulfill narrow, specific or temporary objectives

24 Commercial Paper Funding Facility
The CPFF was created on October 27, 2008 and funded a special purpose vehicle (SPV) that purchased three-month unsecured and asset-backed commercial paper (CP) from eligible issuers

25 Commercial Paper Funding Facility - Explanation
issuers of commercial paper through a special purpose vehicle, aka SPV, which bought unsecured and asset-backed commercial paper for 3 month period from eligible issuers with funds made available by the NY Fed

26 Shadow banking system - Examples
depository banks moved an estimated $5.2 trillion in assets and liabilities off their balance sheets into special purpose vehicles (SPEs) or similar entities

27 National Asset Management Agency - How NAMA works
The Bill envisages that NAMA will arrange and supervise the identification and valuation of property-backed loans on the books of qualifying financial institutions in Ireland, but will delegate the purchase and management of these loans to a separately created Special Purpose Vehicle (SPV).[ Methodological paper for Eurostat on classification of NAMA and SPV].

28 National Asset Management Agency - Master Special Purpose Vehicle
details are provided on the suggested creation by NAMA of a Master Special Purpose Vehicle (SPV) known as National Asset Management Ltd and controlled by the holding company National Asset Management Agency Investment Ltd

29 SsangYong Motor Company - History
Beginning in 1976, Hadonghwan produced a variety of special purpose vehicles

30 Government policies and the subprime mortgage crisis - Capital requirements and risk classification
However, depository banks had moved sizable amounts of assets and liabilities off-balance sheet, via complex legal entities called special purpose vehicles

31 Federal Reserve responses to the subprime crisis - Commercial Paper Funding Facility (CPFF)
The Commercial Paper Funding Facility provided loans to a special purpose vehicle to finance purchases of new issues of asset-backed commercial paper and unsecured commercial paper from eligible issuers.

32 Federal Reserve responses to the subprime crisis - Bear Stearns Companies, Inc. acquisition by JP Morgan Chase Co. (JPMC) Programs included a 'Bridge Loan', an overnight loan provided to JPMC subsidiary, with which this subsidiary made a direct loan to Bear Stearns Companies, Inc, and 'Maiden Lane (I)', a special purpose vehicle created to purchase approximately $30 billion of Bear Stearns’s mortgage-related assets.

33 Federal Reserve responses to the subprime crisis - AIG Assistance
# 'Maiden Lane II', a special purpose vehicle created to purchase RMBS from securities lending portfolios of AIG subsidiaries.

34 Federal Reserve responses to the subprime crisis - AIG Assistance
# 'Maiden Lane III', a special purpose vehicle created to purchase collateralized debt obligations on which AIG Financial Products had written credit default swaps.

35 Collateralized debt obligation - Structures
* Cash CDOs involve a portfolio of cash assets, such as loans, corporate bonds, asset-backed security|asset-backed securities or mortgage-backed security|mortgage-backed securities. Ownership of the assets is transferred to the legal entity (known as a special purpose vehicle) issuing the CDO's tranches. The risk of loss on the assets is divided among tranches in reverse order of seniority. Cash CDO issuance exceeded $400 billion in 2006.

36 Corsham Computer Centre
The site falls within a wider facilities management contract, the Bristol Bath Total Facilities Management project, which was awarded to Debut Services, a Special purpose entity|Special Purpose Vehicle of Babcock Defence and Bovis Lend Lease, in September 2007 for a period of three years with the option to extend the contract for a further three years.

37 American International Assurance
It was a member of American International Group, but separated from the group in 2009 after it was finalized that AIA as well as ALICO (another AIG subsidiary) were placed under the administration of a Special Purpose Vehicle in exchange for the Federal Reserve Bank of New York. In December 2012, AIA was informed by American International Group Inc

38 Jaipur - Jaipur BRTS The responsibility for managing Jaipur BRTS has been given to JCSTL, a special purpose vehicle formed by Jaipur Development Authority and Jaipur Nagar Nigam in a joint venture

39 Offshore Financial Centre - Regulation
An extremely high proportion of hedge funds (which characteristically employ high risk investment strategies) who register offshore are presumed to be driven by lighter regulatory requirements rather than perceived tax benefits.[ ] Many capital markets bond issues are also structured through a special purpose vehicle incorporated in an offshore financial centre specifically to minimise the amount of regulatory red-tape associated with the issue.

40 Offshore Financial Centre - Offshore financial structures
In relation to bond issues, offshore special purpose vehicles are often used in relation to Asset-backed security|asset-backed securities transactions (particularly securitization|securitisations).

41 Asset-backed security
A higher credit rating could allow the special purpose vehicle and, by extension, the originating institution to pay a lower interest rate (and hence, charge a higher price) on the asset-backed securities than if the originating institution borrowed funds or issued bonds.

42 Shelvoke and Drewry In the late 1970s, SD went head-to-head with its arch-rival Dennis Specialist Vehicles|Dennis, and began manufacturing fire apparatus|fire engines through its newly established Special Purpose Vehicles (SPV) division.

43 Hamilton, Bermuda - Economy
As the offshore domicile of many foreign companies, Bermuda has a highly developed international business economy; it is an exporter of financial services, primarily insurance, reinsurance, investment funds and special purpose vehicles (SPV). Finance and international business constitute the largest sector of Bermuda's economy, and virtually all of this business takes place within the borders of Hamilton.

44 Tranche - Example *A bank transfers risk in its loan portfolio by entering into a credit default swap|default swap with a ring-fenced special purpose vehicle (SPV).

45 History of the euro - Reform
a temporary bail out mechanism was agreed and devised in the form of a Special purpose entity|special purpose vehicle (SPV) named European Financial Stability Facility (complemented by the European Financial Stabilisation Mechanism and funds form the International Monetary Fund), aiming at preserving financial stability in Europe by providing financial assistance to eurozone states in difficulty

46 Credit derivatives If the credit derivative is entered into by a financial institution or a special purpose vehicle (SPV) and payments under the credit derivative are funded using securitization techniques, such that a debt obligation is issued by the financial institution or SPV to support these obligations, this is known as a funded credit derivative.

47 European Financial Stability Facility
The 'European Financial Stability Facility' ('EFSF') is a special purpose vehicle financed by members of the eurozone to address the European sovereign-debt crisis

48 Public-private partnerships
Typically, a private sector consortium forms a special company called a special purpose vehicle (SPV) to develop, build, maintain and operate the asset for the contracted period.Zheng, J

49 Denmark and the euro - Consequences of a euro adoption
In the wake of the 2010 European sovereign debt crisis European leaders established the European Financial Stability Facility (EFSF) which is a special purpose vehicle[ The Council and the member states decided on a comprehensive package of measures to preserve financial stability in Europe, including a European financial stabilisation mechanism, with a total volume of up to EUR 500 billion

50 Collateralized fund obligation - Basic Structure of a CFO
Generally, money is allocated into several different tranches by investors based on priority. A tranche is described as a security that can be divided in to small portions and then sold in those portions to an investor. From the tranches the funds are then invested into a special purpose vehicle (SPV). SPVs are developed solely for the purpose of a CFO.

51 Temasek Holdings * In February 2007, Temasek set up and listed the CitySpring Infrastructure Trust, a yield-oriented vehicle for infrastructure investments in Asia and took advantage of the increasing depth of the debt market to introduce different risk-related securities through Astrea (business)|Astrea, a special purpose vehicle holding a portfolio of investments in private equity funds.

52 Grey import vehicles - The Philippines
Commercial vehicles, special purpose vehicles are not under EO 418 and thus are currently being imported into Subic and [ Poro Point, San Fernando]. Subic sees roughly 1 cargo ship per week, and has many licensed locators. A second port, Poro Point is, as of February 2014, once per month and is solely facilitated by Forerunner Multi-Resources as the licensed locator, and SASTRAD KK in Japan as the sole shipper.

53 Dongfeng Motor Group - Philippines
The main business are sales of the Dongfeng series light commercial vehicles, Dongfeng Cummins engines parts, mini-vans, the Special Purpose Vehicle series, pickups, buses, tractor heads and dump trucks etc.

54 MetroLink Express Gandhinagar and Ahmedabad
'Metrolink Express for Gandhinagar and Ahmedabad (MEGA)' is a proposed mass-transit rail system for the cities of Ahmedabad and Gandhinagar, India. The special purpose vehicle company was established in February 2010 and the Phase–1 of project was approved in October 2014.

55 MetroLink Express Gandhinagar and Ahmedabad - History
The special purpose vehicle company, Metro Link Express for Gandhinagar and Ahmedabad (MEGA) Company Ltd, was established by Government of Gujarat on 4 February 2010 with Rs 200 crore. Later in 2014, it was decided that the Central Government will own 50% of the company.

56 Chennai Metro - Planning
The approval for the project was finally given by the state cabinet on 7 November 2007 and is to be executed by a special purpose vehicle, the Chennai Metro Rail Limited (CMRL).

57 Ludhiana Metro - History
A special purpose vehicle, the Ludhiana Metro Rail Corporation (LMRC), will be established to execute the project.[ The Pioneer]

58 Ludhiana Metro - Project Details
Also a Special Purpose Vehicle (SPV) should be set up for the Ludhiana Metro and should be registered under Companies Act. It should be a public sector undertaking of the state government and be named Ludhiana Metro Rail Corporation.

59 Pune Metro - Background
Pune Metro Rail Corporation (PMRC), a special purpose vehicle (SPV) to execute for the project, will be formed.

60 Kolkata LRTS 'Kolkata Light Rail Transit System (LRTS)' is a mass rapid transit system proposed for the city of Kolkata in India. The Government of West Bengal and SREI Infrastructure Finance signed a memorandum of understanding (MoU) to set up the light rail transit (LRT) system. A special purpose vehicle, Kolkata Mass Rapid Transit Pvt Ltd has been formed to execute this Rs.6000 crore project.

61 *Heudebouville (special purpose vehicles manufacturing)
Renault Sport - Sites *Heudebouville (special purpose vehicles manufacturing)

62 Dedicated Freight Corridor Corporation of India - Introduction
DFCCIL has been designated by Government of India as a `special purpose vehicle`, and has been created to undertake planning development, mobilization of financial resources and construction, maintenance and operation of the Dedicated Freight Corridors. DFCCIL has been registered as a company under the Companies Act 1956 on 30 October 2006.

63 Bangalore Commuter Rail - History
The state government approved the suburban rail system on 5 July Chief Minister Siddaramaiah approved the system in the state budget that he presented on 9 July The budget proposed the setting up of the Bangalore Suburban Rail Corporation Limited, a special purpose vehicle to implement the project, and allocated to implement the system. The DULT plans to build four of seven lines proposed by RITES.

64 Kochi Metro - Planning A Cabinet decision was taken to form a Special purpose entity|special purpose vehicle (SPV) called Kochi Metro Rail Ltd

65 Synthetic CDO - Characteristics
These securities are packaged and held by a special purpose vehicle (SPV), which issues notes that entitle their holders to payments derived from the underlying assets

66 Rail Land Development Authority
The need for considerable increase in internal generation of resources for such investment had been realized by the Indian Railways for some time. However, focused efforts in this direction commenced in 2001 when the idea of setting up a Special purpose entity|special purpose vehicle to generate non-tariff revenues through commercial exploitation of railway land took shape. The efforts culminated in the setting up of the 'Rail Land Development Authority (RLDA)' on 1 November 2006.

67 Little Chef –2007 The private equity business Permira bought Travelodge and Little Chef from Compass Group in December 2002 for £712million, forming a special purpose vehicle called TLLC Group Holdings. Those Little Chefs at Moto Hospitality|Moto motorway service areas – formerly the Granada motorway service areas, and owned by Compass until 2006 – were owned by Moto and operated as franchised outlets.

68 Mumbai International Airport - Airport services
* Mumbai Aviation Fuel Farm Facility Private Limited (MAFFPL) is a Special Purpose Vehicle of MIAL and Bharat Petroleum, Hindustan Petroleum and Indian Oil Corporation|Indian Oil, each having a stake of 25%. The Joint venture received clearance in October 2014 for setting up an Integrated aviation fuel facility at CSIA.

69 Balmer Lawrie - History
Balmer Lawrie Investments (BLI) is a listed special purpose vehicle which holds the majority stake in Balmer Lawrie.

70 Bellary - Air :The contract for the development and operation of this greenfield airport has been awarded to Chennai-based MARG Limited, which has incorporated a special purpose vehicle, MARG Krishna Devaraya Airport Pvt. Ltd. In addition to terminal buildings, runways and control towers, MARG will develop access facilities and build utilities necessary to serve the airport during the operational phase.

71 Mason, Ohio - Government/Facilities
In addition, the department operates several special purpose vehicles, including motorcycles, bicycles, and Segways.

72 Chelyabinsk Forge-and-Press Plant - Overview
The company's main products are special purpose vehicles such as dumpers, short loggers, timber trucks, pipe trucks and bolsters, as well as wheels for cars, trucks, trolleybuses, trailers and semi-trailers and for heavy hauler and road construction machinery. In addition, the company produces forgings and presses used in manufacture of pipeline armature, cars and trucks, special-purpose equipment, vehicles, railway transport.

73 King Abdullah Design and Development Bureau - Jordan Light Vehicle Manufacturing LLC (JLVM)
JLVM vehicles production strategy is Build to Order and/or Engineer to Order to the customer's specific requirements ranging from soft skin and special purpose vehicles to fully armoured Internal Security Vehicles (ISVs) based on a variety of commercial off the shelf chassis

74 Sentinel tank - Survivors
However, states that the Sentinels were too different to the M3s and Matildas to be used for training and would require modifications and the manufacture of spares if they were to be used as special purpose vehicles

75 Mitsubishi Debonair - Model history
The Debonair was seen as a special purpose vehicle, and not marketed towards the general motoring public

76 HITEC City The Project is being developed by Larsen and Toubro Limited through its Special Purpose Vehicle, LT Hitech City Limited, a joint venture company of LT Infocity Limited and Andhra Pradesh Industrial Infrastructure Corporation Limited.

77 Panzer I The 'PanzerI' was a light tank produced in Nazi Germany|Germany in the 1930s. The name is short for the German (armored fighting vehicle mark I), abbreviated . The tank's official German ordnance inventory designation was Sonderkraftfahrzeug|SdKfz101 (special purpose vehicle 101).Nomenclature see: Gander, Tanks and Armour: Panzerkampfwagen I II, p.10

78 Corporation of Chennai - Solid waste management
Ltd a special purpose vehicle run by the Hyderabad, India|Hyderabad-based Ramky Group for a period of seven years starting January 2012

79 Adyar Eco Park - Early phase
The budget of 600 million for creating the park was passed in 2005 and Adyar Creek Eco Park Limited, a special purpose vehicle, was set up to harness and channel the funds for development

80 Vehicle registration plates of India - Unique letters
In Maharashtra the two letter in each RTO is classified for a different kind of vehicle, eg. MH14BT is assigned for MSRTC buses in Pimpri, MH02CR is for commercial vehicles in Mumbai, MH31SW is for two wheelers in Nagpur, MH04GM is for cars in Thane and MH12JK is for special purpose vehicles in Pune.

81 Vehicle registration plates of India - Unique letters
AA, AB, AC etc.), Big cars by B, Small cars by C, special purpose vehicle such as ambulance,crane etc by D, medium size goods vehicle by G, heavy vehicles by H, small loading vehicle by L, motor cycles by M, passenger buses by P, passenger auto by R, Scooter by S, taxis by T and passengers by E, F, I, J, K, N, Q, U to Z.

82 For More Information, Visit:
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