The Secondary Debt Market
time left 3 : 00
"With the credit ..... likely to grow worse before it gets better, what are commercial banks doing in the face of this problem?" asks Kingsley Greenland of DebtX.
Increasingly, the answer is to sell loans in the debt market; powered by electronic trading, the global secondary market is now sufficiently liquid on a day-to-day basis to efficiently dispose of non- or poorly-..... debt, as well as high-quality loans, as part of normal portfolio rebalancings.
Loan sales have become a ..... weapon because electronic due diligence, trading and closing allow competitive bidding of everything from multi-billion credits to loans or pools of loans as small as US$1million.
As a result, loan sales are now more attractive than the traditional solution of ..... loan workouts; rather than incur the expense and management distraction of sticking with problem assets, it now makes more sense to sell and put the problems behind.
The market's liquidity has translated into strong price execution, which makes a loan sale strategy all the more ......
Today, debt can be traded at a fraction of the cost and time compared to the traditional, offline environment because electronic trading has eliminated much of the ..... in the process.
The high fixed transaction costs that previously ..... liquidity have largely gone away.
In previous years, ..... diligence required investors to make onsite visits to search boxes of loan documents, collateral information, appraisals, operating statements, court proceedings or other underwriting documents.
If investors decided against making an offer, or another bid was accepted, travel expenses and management time went ......
At electronic trading platforms, investors can now view hundreds or even thousands of pages of loan documents online; ..... of documents can be easily searched, and sophisticated financial modeling is built right into the platform.
