A financial vehicle corporation (FVC) is a special-purpose entity used to convert pools of financial assets, most often loans, into investment instruments. It acquires or otherwise holds the assets and finances them by issuing securities whose repayment is linked to the resulting portfolio. These instruments may be distributed through a public offering or placed directly with selected investors. Some arrangements divide ownership and issuance between separate FVCs: one holds the assets, while another issues the securities. The structure places the assets in a vehicle separate from the original lender and creates a distinct channel for financing them.
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Source: European Central Bank (ECB) (source). This glossary entry is an independently worded adaptation of the cited information.