1. WHAT IS A SPECIAL PURPOSE VEHICLE (“SPV”)?
An SPV is an entity set up to participate in a transaction. It usually has one specific objective. In the
Cayman Islands an SPV can either be a Company, Trust, or Partnership. The vehicle most commonly
used is the Company.
How can an SPV be used?
Although there are many uses for an SPV, a common area is in a cross border lease transaction. These
structures can be used in the financing of any big ticket assets, such as airplanes, trains, buses, industrial
facilities or communication equipment.
In a typical structure an asset is purchased by an SPV Company through a number of loans which have
been provided by a lender or a syndicate of lenders. The asset is then ultimately leased to the end user of
the assets, through a number of leasing arrangements.