SGS 11 - Structured finance Flashcards
1
Q
What is the definition of a derivative?
A
A bi-lateral contract whose value is derived from an underlying asset (hedging)
2
Q
What are the advantages of an SPV?
A
- Tax advantages
- Limit risk exposure
- Incorporation in a cheaper jurisdiction
- Allows the sponsors to sell the project by share sale
3
Q
What does the anagram CRUDE stand for?
A
Solutions to risk: Conditions precedent Representations Undertakings Due diligence Events of default
