ABA Banking Journal - August 2007 - (Page 23)

management team, and specializes in what CarVal dubs “credit-intensive assets.” She explains that many factors go into the pricing decision. For the partnership, the four key points are the loan’s performance; the loan’s “story”—what it’s about, how it came to be made, why it made sense at the outset; the loan’s contractual terms; and the quality of the collateral and the certainty that the lender really has rights to it. Geography can play a part, because the ease of making loan recoveries can vary from state to state. FinPro’s Rob Peacock points out, for instance, that it is much harder for a creditor to gain control of a property in a debtor’s possession than in some other states. What current appraisals have to say about collateral property makes a big difference, too. A weak appraisal can drive the price of a loan down to the 60s on a dollar, says Laird Minor, managing director, Nautilus Capital And plain old supply and demand also plays a part in pricing, according to J. Kingsley Greenland II, president and CEO of The Debt Exchange. More buyers of troubled debt are out there now, looking for opportunities to snap up salvageable loans. (Debt Exchange runs an electronic debt marketplace on the internet, www.debtx.com. See the digital edition for additional coverage.) Doing it yourself While outside firms can smooth the process of finding buyers for troubled debt, simply shopping a loan around us- ing the bank’s own resources isn’t out of the question. A local investor may be interested in acquiring certain types of credits, for instance, or some other source may be within arm’s reach. “What the regulators want to see is that it isn’t an insider deal, that the price that the bank received was reasonable,” says Catherine Ghiglieri. “Also, the regulators want to understand what the thought process of the board was in deciding to handle it the way the bank did.” Still, companies in the business naturally see advantages to hiring professionals who watch the markets for a living. “We believe loans are sold,” explains The Debt Exchange’s Kingsley Greenland. In this context, tech remains a tool, not a service unto itself. BJ ABA BANKING JOURNAL/AUGUST 2007 23 http://www.debtx.com http://www.debtx.com http://www.consultantsandbuilders.com http://www.consultantsandbuilders.com

Table of Contents Feed for the Digital Edition of ABA Banking Journal - August 2007

Contents Editor's Column The Unbankers Snapshot: Do Share Repurchases Signal More M&A Activity Sleight of Mind Goals Behind Proposed ABA/ACB Merger ABA Resources ABA Chairman's Position Should You Sell Those Nonperformers Pass the Aspirin Branch Design - Evoking a Sense of Place Two Banks Take the LEED Move Over, Buddy Service Feature: Bankers' Banks Directory Websites: What's State of the Art for Banks? Citi Mobile to Go Strong with iPhone? Date First, Marry Later Mailbox Banker's Mart To Advertise/Index of Advertisers The Economy

ABA Banking Journal - August 2007

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.