European financial institutions are missing opportunities to sell distressed loans because the structure of most loan sales precludes many small- to mid-tier institutional investors from bidding, according to a survey of capital markets participants by DebtX, the world´s largest marketplace for loans.
DebtX´s poll of more than 50 firms with €150 billion of funds under management found that many investors would be active buyers of distressed European bank debt if loan sales were structured in smaller pools or allowed for the purchase of individual loans or small groups of loans.
European Distressed Loan Buyer Survey: Creating Liquidity for European Bank Debt highlighted five other key trends among European loan buyers.
"If Europe´s largest institutions can reduce the size of transactions, there will be more liquidity for European bank debt," said DebtX CEO Kingsley Greenland. "European banks could accelerate their strategic goal of reducing NPLs and rebuilding their balance sheets."
Investors also told DebtX that institutions selling distressed debt appear willing to sell only to the largest investors. They urged that the bidding process be more open and transparent. By offering loan sales that appeal to investors of all sizes, the study concluded there would be more bidders, more liquidity, and a greater opportunity to maximize the sale price of loans.
For more information, contact Gifford West, Managing Director, head of European Operations, +1-617-531-3436, gwest@debtx.com.
About DebtX
DebtX is the world´s premier, full-service loan sale advisor for commercial, consumer and specialty finance debt. DebtX operates the largest online marketplace for loan sales, serving commercial banks, investment banks, insurance companies, and government-sponsored enterprises. DebtX´s innovative deal management platform and loan sale process maximize proceeds and have been assessed and approved by many of the world´s most sophisticated financial institutions for functionality, security and privacy. DebtX provides valuation and analytics services, including objective mark-to-market loan valuations using unique pricing models that incorporate data from hundreds of thousands of loans. DebtX provides web-based deal management platforms for syndication, agency, and loan sale professionals. DebtX is based in Boston, with U.S. offices in San Francisco, Atlanta, McLean (VA), and New York and European offices in the United Kingdom, Spain and Germany. For information, call 617.531.3400 or visit www.debtx.com.