Voting interest does not convey control
Operating Co. A
Entity designed to achieve a special purpose
Lenders to Entity
Operating Co. A does not own the Entity
The Entity’s business arrangements are with Operating Co. A
Typically, the Entity is highly leveraged. Co. A (or another entity) may guarantee the loan from lenders to Entity.
SPE (Special Purpose Entity) is used to describe a wide variety of structures. However, there is no agreed-on definition of “SPE.”