Steve, thanks for your very clear and helpful description of the typical SPV. Better than anything I have read yet.
My main question at the moment has to do with step (ii), the money the SPV borrows. This debt is off the balance sheet of the Parent, although the Parent still has contingent liability. And I would like to know how much of this off the balance sheet debt is out there for the NFCB sector as a whole? (and ultimately of the Financial sector as well, but right now my main interest is the NFCB sector) How widespread is this scheme for the NFCB sector as a whole? How much off the balance sheet debt was created by NF corporations in the 1990s? Any idea? Know of anyone who might? And also a question about steps (iii) and (iv): the SPV buys the asset from the Parent, right? Otherwise, the Parent could not book the $100m as revenue, right? It seems to me that the main purpose of this scheme is step (iv): to increase the reported revenue, and hence the reported profit, of the Parent. Is this correct? Thanks again, Fred
