Definition of Special-Purpose Entity (SPE)

finite-life entities created by corporations, usually as subsidiaries but sometimes as partnerships, trusts, or other forms of unincorporated structures, for a single, welldefined, and narrow purpose, such as those (sometimes also called derivative products companies) established to issue income-preferred securities. Also known as special-purpose vehicles or variable interest entities, SPEs got a bad name when they were used by Enron to conduct improper off-balance-sheet financing activities.