Firms can finance themselves on- or off-balance sheet. Off-balance sheet financing involves transferring assets to quot;special purpose vehiclesquot; (SPVs), following accounting and regulatory rules that circumscribe relations between the sponsoring firm and the SPVs. SPVs are carefully...

This paper analyzes securitization and more generally special purpose vehicles (SPVs), which are now pervasive in corporate finance. The first part of the paper provides an overview of the institutional features of SPVs and securitization. The second part provides a model to analyze the...