Special Purpose Entity (SPE's)

Special Purpose Entity is essentially a "vehicle" used by a parent company to isolate or "secularize" assets. Part of a parent-subsidiary relationship. They are sometimes known as "variable interest entities". These entities are typically financed by debt, with only equity financing being low. Therefore, they tend to be very leveraged. They also are not limited to the legal form of business (can be a corp or even a trust).