The issuer sells bonds to capital market investors and the proceeds are deposited in a collateral account, in which earnings from assets are collected and from which a floating rate is payed to the SPV. The sponsor enters into a reinsurance or derivative contract with the issuer and pays him a premium. The SPV usually gives quarterly coupon payments to the investors. The premium and the investment bond proceeds that the SPV received from the collateral are a source of interest or coupons paid to investors. If there is no trigger event during the life of the bonds, the SPV gives the principal back to the investors with.
