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However, this risk would not lower the parent company's overall credit rating because the SPE would be a legally separate entity.
Conversely, a company with a low credit rating might be able to borrow on better terms if it were to form an SPE and transfer significant assets to that subsidiary and issue secured debt securities.
That way, if the venture were to fail, the lenders would have recourse to the assets owned by the SPE.
This would lower the interest rate the SPE would need to pay as part of the debt offering.

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