In practice, the business purpose of a special purpose vehicle (SPV) is limited exclusively to activities in connection with the respective securitisation transaction.
This avoids business risks that could arise from other activities for the SPV.
At TSI Services, we establish the respective SPV as a separate company that is independent of the originator. This means that in the event of the originator's insolvency, the SPV's assets do not form part of the insolvency estate and the SPV's insolvency is largely ruled out.
This is referred to as an insolvency-proof SPV and corresponds in a special way to the requirements that the capital market and rating agencies place on SPVs.
This is known as insolvency remote structure and is achieved by foundations acting as shareholders of the SPV.
These foundations of the TSI securitisation platform are:
- Capital Market Research Foundation for Germany as a Financial Centre
- Capital Market Law Foundation for Germany as a Financial Centre
- Corporate Finance and Capital Markets Foundation for Germany as a Financial Centre
More than 160 securitisation transactions have already used a German SPV for their securitisation transaction (as of April 2023). SPVs provided by TSI are based exclusively on German law.
Accordingly, the originator has the option of being able to submit binding information to the German tax authorities in order to obtain the desired tax law certainty.
All leading rating agencies, big law firms, auditing firms, supervisory authorities as well as the European Central Bank (ECB) and numerous domestic and foreign originators and arrangers are very familiar with our the standard we apply in providing a German SPV, and the processes have been tried and tested many times over.