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ARCHIVE | Criteria | Structured Finance | CDOs: Structured Investment Vehicle Criteria Mar 02
Standard & Poors, March 2002
Abstract
A structured investment vehicle or 'SIV' is a limited-purpose operating company that undertakes arbitrage activities by purchasing mostly highly rated medium- and long-term, fixed-income assets and funding itself with cheaper, mostly short-term, highly rated CP and MTNs. While there are a number of costs associated with running a structured investment vehicle, these are balanced by economic incentives: the creation of net spread to pay subordinated noteholder returns and the creation of management fee income. Vehicles sponsored by financial institutions also have the incentive to create off-balance-sheet funds management structures with products that can be fed to existing and new clients by way of investment in the capital notes of the vehicle. Since the market's inception different names have been given...
Companies mentioned in this report are: New Jersey,Austria (Republic of),Canada,Denmark (Kingdom of),New Zealand,Norway (Kingdom of),Sweden (Kingdom of),Japan (Unsolicited Ratings),Swiss Confederation (Unsolicited Ratings),European Aeronautic Defence and Space Co. N.V.,United States Can Co.,U.K. Insurance Ltd.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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