Tagor | Real Estate Management

A range of potential options are to be considered by financial institutions when determining REO’S , secured NPL’S and portfolios strategy, as part of the decision making process for selected loans. A thorough assessment should be conducted to determine the best realization strategy for both the portfolio, sub-tranches and for achieving the best solution for the bank.

Clean Disposal / Sale

Overview

Sale of loans outright either on a standalone basis for single assets, or for segments of the portfolio to our partner investors and/or other investors introduced by us.
REO or NPL servicing would also be transferred.
Future servicing costs, P&L and capital issues dealt with “up front” by the bank.

Key considerations

Redeployment of management, staff and other resources including the release of documents and IT space and the reduction of holding costs.
Improved liquidity, capital adequacy and possible taxation advantages for banks.

Assets

This will typically include a servicing secured NPL’S which is desirable for strategic reasons (e.g. lack of servicing or collection capacity, rapidly increasing levels of arrears, unfinished projects).

Risk Participation

Overview

The Bank would transfer loans to an SPV and a minority/majority share would be sold to our partner investors and/or other investors introduced by us. We would also assume the servicing role for the assets/portfolio.
A minority share sale for the Bank would be preferable, and may provide a capital/liquidity uplift, with a lower P&L hit.

Key considerations

Allowing the Bank to share the upside with or without de-recognition on the disposal.
Possibility to apply to the whole portfolio and to provide solutions for the Bank staff/systems.
The investor takes control of the management, thereby accelerating recoveries.
Provides capital uplift if structured optimally.

Assets

The inclusion of portfolios or single assets with loans which have defaulted and have moderate/high provisioning or recently non-performing, finished or unfinished projects). The timing/costs to collect may be considerable or uncertain.

External Servicer

Overview

The Bank would appoint us as a servicer undertaking special primary servicing for the portfolio.
We would be responsible for the day to day asset management of the selected portfolio.
We can restructure the portfolio in the short to medium term and revisit the strategy in 12-24 months.

Key considerations

Scaling and focusing on restructuring and servicing.

Assets

Likely to include longer term loans with stronger borrowers and lighter provisions. The potential discount through a sale, in the current market, of these loans is likely to compare unfavorably with a hold to maturity outcome.