medium · Asset-Backed Securities abs-core
Which characteristic is commonly required for an entity to be considered a 'bankruptcy-remote' SPE?
- The entity must have no employees, instead relying on third-party servicers to manage collection and recovery of the securitized loan pool.
- The entity must have at least one independent director whose consent is required for a voluntary bankruptcy filing.
- The entity must share its bank accounts and books with the originator, keeping combined records for full transparency.
- The entity must be free to incur unlimited additional debt without limit to fund new, unrelated business operations.
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