The nature of a pass-through is that of an equity instrument. Therefore, the only reason a pass-through device can claim a tax exemption as an intermediary is that it is completely passive and it had no beneficial interest in the receivables.
Senior-subordinate structures, coupled with tranching, make the senior one take the character of a debt with a fixed repayment, rate of interest, etc with the junior one taking the form of equity. In such a case, a pass through treatment is unlikely.
Sections 61-63 are from viewpoint of the transferor - I don't think these sections have anything to do with the nature of the SPV. Pass-through is the nature of the SPV; the transfer is the same in either case.
Posted on Aug 5, 2002, 9:42 AM from IP address 220.127.116.11