Structured Investment Vehicle (SIV)

RECENT NEWS
Forbes  Oct 7  Comment 
Australia’s technology startup environment is flourishing especially in Sydney and Melbourne. Communities, accelerators and co-working spaces have sprouted and more corporates are following the trend. Although things are moving in a very...
BusinessWeek  Aug 29  Comment 
Fitch Ratings Ltd. settled negligence claims brought by the California Public Employees’ Retirement System’s over ratings it gave structured investment vehicles that later collapsed, agreeing to provide Calpers with documents from a similar...
Red Orbit  Sep 17  Comment 
The immunodeficiency condition found in monkeys that was the ancestor of the HIV virus is far older than first believed, according to a new study by researchers from the University of Arizona and Tulane University. The study is published in...
Skeptical CPA  Mar 10  Comment 
"The first step in treating Washington's spending addiction is for the political class to admit is has a problem. This means being honest with taxpayers about the debts politicians are racking up. ... The Obama Administration has refused to...
Wall Street Journal  Sep 25  Comment 
One of the largest liquidations of a structured investment vehicle will be held Friday amid rising prices and increased investor demand for distressed securities.
Red Orbit  Jul 22  Comment 
Wild chimpanzees infected with Simian Immunodeficiency Viruses can contract AIDS-like symptoms and die, U.S.
Financial Times  Jul 6  Comment 
$400bn of assets in structured investment vehicles have been disposed of
Credit Writedowns  Jul 15  Comment 
Remember the money center banks' ludicrous attempt to pretty up those off-balance sheet vehicles via the 'Super SIV?' Well, that was a clear bust. But, the toxic waste in those vehicles is still there. Some of these vehicles have been brought...
naked capitalism  Apr 7  Comment 
Reader eTrader alerted us to an important but under-reported development today, namely, that FAS 140 has been provisionally modified so as to kill SIVs. While this structure was effectively dead as of now, there remained the possibility of it...




 
TOP CONTRIBUTORS

Structured Investment Vehicle

It is a pool of investment assets that attempts to profit from credit spreads between short-term debt and long-term structured finance products such as asset-backed securities (ABS). Funding for SIVs comes from the issuance of commercial paper that is continuously renewed or rolled over; the proceeds are then invested in longer maturity assets that have less liquidity but pay higher yields. The SIV earns profits on the spread between incoming cash flows (principal and interest payments on ABS) and the high-rated commercial paper that it issues. SIVs often employ great amounts of leverage to generate returns.

Also known as "conduits".

SIVs are less regulated than other investment pools, and are typically held off the balance sheet by large financial institutions such as commercial banks and investment houses. They gained much attention during the housing and subprime fallout of 2007; tens of billions in the value of off-balance sheet SIVs was written down as investors fled from subprime mortgage related assets.

Many investors were caught off guard by the losses because little is publicly known about the specifics of SIVs, including such basics as what assets are held and what regulations determine their actions. SIVs essentially allow their managing financial institutions to employ leverage in a way that the parent company would be unable to due to capital requirement regulations.

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki