Optimising Distressed Loan Books: Practical Solutions for Dealing With Non-performing Loans

The fundamental question posed by this book is why banks fail to maximise distressed loan collections where the distressed debt investor succeeds? Since the time of the Savings and Loans Crisis in the United States in the late 1980s, a broad array of very successful investors have made tremendous fortunes off the loan book losses of banks. How can it be that banks cannot maximise proceeds of defaulted loan books and portfolios, the same way an investor who buys those very same loans from the bank can? The answer to this question is found in examination of the "Bank Arb. Trade" - the ability of sophisticated investors to uncover value, or arbitrage, in bank loan portfolios that the banks themselves simply miss or cannot realise. Believed to be the first of its kind, this book builds on twenty years experience of hands-on asset monetisation, loan portfolio servicing and debt work-out to describe how the wily, deft, vulture investor converts the dredges of loan defaults into gold. The work is divided into three parts. The first section analyses how and why banks fail to maximise distressed recoveries. The second section is a practical, basic training manual; an A to Z "bible" of techniques, systems and processes that will explain to investors or lenders how to go about earning back their losses and in many cases, clearing amounts greater than par. The final section analyses lessons from previous crises and proposes how in the future we can improve the way we do things. The book is intended to be used by bank executives and officers, their advisors, loan servicers, investors, and government sponsored entities as a working tool to assist them in retaining these rewards for themselves. Accountants, administrators, and rating agencies should find this book to be an extremely useful source of reference, whilst regulators, academics and students may also find it will better their understanding of the secretive distressed debt industry and therefore the financial system.