Orphan Structure

An orphan structure is a financing term referring to a company whose shares are held by a trustee on a non-charitable purpose trust. The company is said to be an "orphan" as it is not beneficially owned by anyone.

Orphan structures are usually used in offshore structures to ensure that the assets and liabilities of the subject company are treated as "off-balance-sheet" with respect to the sponsor of the structure. Other reasons for creating an orphan structure are to avoid or minimise regulation which might otherwise apply to a structure, and to ensure that the company is "bankruptcy remote" from companies in the same group as the sponsor.

Orphan structures are relatively common features of securitisation vehicles, where the asset backed bonds are issued by the orphan company.


Famous quotes containing the words orphan and/or structure:

    A man should not go where he cannot carry his whole sphere or society with him,Mnot bodily, the whole circle of his friends, but atmospherically. He should preserve in a new company the same attitude of mind and reality of relation, which his daily associates draw him to, else he is shorn of his best beams, and will be an orphan in the merriest club.
    Ralph Waldo Emerson (1803–1882)

    A structure becomes architectural, and not sculptural, when its elements no longer have their justification in nature.
    Guillaume Apollinaire (1880–1918)