Valuation of receivable portfolios
Determination of the fair value of the debt portfolio is crucial for entities that are considering an investment in the debt portfolio, or for institutions and companies planning to sell past due receivables.
Systematic fair value appraisals of the debt portfolio are also necessary in the case of establishing debt financing on the portfolio and for reporting needs of investment funds.
CMT’s offer includes preparation of valuations for the needs of:
- transactions – determination of the market value of a portfolio of receivables or a single debt for the purpose of sale/acquisition;
- securitization – determination of the market value of a portfolio of receivables for the sake of reports connected to the secured financing;
- reporting – determination of the value of the fund’s assets for reporting purposes related to the publication of the net asset value for the investment certificate;
- management/enforcement – determination of the market value of secured receivables, e.g. bonds, after a credit event in the form of default. Valuations of this type are carried out with the participation of REIA Sp. z o.o., a company from the CMT Group, which provides commercial property valuation services.
Valuation of portfolios of unsecured retail receivables is prepared using the PD/LGD methodology.
This method has found a very wide application in practice – according to the New Capital Agreement it is used by banks in an advanced variant of internal ranking methods. It is also used in the estimation of losses resulting from the insolvency of corporate bond issuers, as well as to determine the value of portfolios of loans and retail loans. In the case of valuations of corporate debt portfolios or mortgage-backed portfolios, the discounted cash flow method is the most frequently used.
CMT has extensive experience in preparing valuations of debt portfolios of a diversified nature. We have prepared valuations of portfolios for the purposes of transactions for:
- loan companies,
- debt collection companies,
- cooperative banks,
- cooperative savings and credit unions.
We systematically perform fair value measurements of debt portfolios for companies which are at the forefront of loan companies in Poland. Furthermore, CMT prepares periodic valuations of investment certificates of non-standardised securitisation funds. CMT Advisory’s experience includes several dozen valuations of debt portfolios.
A bespoke and partnership approach to each project is the distinguishing feature of CMT Advisory’s offer.
While preparing valuations, we try to get to know the best possible characteristics of our clients’ operations in order to properly reflect the detailed features of the resulting receivables in the valuation. Presentation of the offer of valuation of a given portfolio is preceded by the analysis of its basic characteristics and of the possibility of the client’s generating data used in the valuation process. Furthermore, in the course of subsequent updates, we monitor and analyse changes in the situation over time, consulting our clients on the trends and phenomena that have been noticed.