Loan Sales Strategy and Management Approach

DebtX represents sellers on an exclusive basis, tailoring each engagement to meet our client’s goals and objectives. Our framework for every sale breaks down into two phases: strategy and execution. Specific objectives and deliverables within these phases represent the loan sale life cycle.

Loan Sales Infographic

Loan Sales Strategy

The strategic stage includes developing an understanding of our client’s goals and objectives, valuing the loan or loan portfolio, and recommending the most effective sale strategy.

Loan Sales Execution

The execution phase includes underwriting and preparation of due diligence and legal materials, investor outreach and marketing, bidding, closing, post-closing activities.

Our Cross-functional Approach

DebtX’s loan sale teams are organized around the sale lifecycle from sales and marketing through valuations, underwriting, trading and closing with support from our legal, accounting, and technical groups.

Each team is staffed with highly skilled and specialized personnel for each step in the process. DebtX’s experienced team members from different units communicate and collaborate throughout the loan sale lifecycle to optimize sale execution.

Our senior managers and executives oversee the process from start to finish. We support our professionals with best-in-class technology, giving us a competitive advantage as the seller’s agent.

Active Portfolio Management

Our clients have found loan sales to be an important portfolio management tool through all phases of an economic cycle. A loan or portfolio sale is not always the best solution, but we can help you identify when it is. Our Loan Sales Advisory Services support active portfolio management, whether it is selling a single non-performing healthcare credit to avoid foreclosure, or a portfolio of hotel loans to reduce sector concentration. A superior market perspective and a holistic view of your institution’s exposure are essential components of active portfolio management.

 

We help our clients achieve long-term success

We help our clients access liquidity and reposition loan portfolios strategically for growth and long-term success. Our Loan Sales Advisory Services support the active portfolio management approach that leading institutions are pursuing to:

 

  • Respond to changing market conditions
  • Address regulatory guidance and requirements
  • Reduce credit risk
  • Manage headcount and staff workload
  • Optimize asset class and sector exposures

An active credit portfolio management approach assesses the strategic implications for the lending portfolio, and recommends actions to business leaders.

Performing loan sales

The leading financial institutions have developed a greater appreciation of how active portfolio management can facilitate growth and address scrutiny from regulators. These institutions engage DebtX to execute sales of performing loans for several reasons including:

 

  • Deploying capital more strategically
  • Distributing excess loan origination capacity
  • Reducing concentration exposure
  • Divesting non-core portfolios following M&A
  • Proactively managing compliance with regulatory requirements

Non-performing loan (NPL) sales

Financial institutions sell non-performing loans to rapidly dispose of unwanted assets, often at a gain to book values. Loan sales reduce expenses related to loan workouts and in some cases, particularly for smaller institutions without dedicated workout teams, are the preferred resolution for troubled assets.

Loan sales enable bankers to focus on profitable lending activities rather than engage in protracted workout negotiations with uncertain outcomes. Selling problem loans:

  • Frees up reserve capital
  • Eliminates earnings drag
  • Aligns the balance sheet and income statement with the institution’s strategic goals
  • Leads to improved stock prices