No two loans in a stressed portfolio are the same. Some loans are at the stage of recent default, thus affording a higher chance of recovery. Others may have been in default for a while making incremental recovery challenging. Since retail ARC portfolios consist of bad loans with relatively high vintages, the corresponding recovery problem is significantly challenging. Consequently, ARCs need to accurately weigh the price paid for acquiring a bad loan book against potential recoveries. Our solution for retail ARCs includes:
Ultimately, our solution provides smart buy-side logic to the ARCs to price their acquisition of degraded portfolios at par with the recovery potential of the portfolio. The icanpe platform delivers this solution rapidly and at scale.