Assets are required to be transferred to a Special Purpose Vehicle ("SPV") as a true sale in order to isolate the transferred assets from the originator's credit risk (bankruptcy remoteness).

An SPV is an independent legal entity that is established for the purpose of securitization, generally in the form of a special purpose company (SPC), trust, partnership, limited liability company, or stock corporation.

In a typical case of securitization, the SPV issues bonds backed by the cash flow generated by transferred assets, pays proceeds from the bond issuance to the originator as consideration for the asset transfer while paying all principal and interest to bond investors from cash flows arising from the intellectual property.

The following is a diagram of alseTIP's IP structured finance flow that helps illustrate the mechanism. For more information about alseTIP's process, visit the transaction structure information pages.