Guide to Issues for Trades of Non-Performing Loans across Europe and China - Available Now
Covid-19 caused massive economic and societal dislocation as well as an unprecedented public health crisis. It has also impacted default rates and increased regulatory pressure on banks to dispose of noncore assets and estimated trillions of non-performing loans (NPLs) on their balance sheets. Consequently, market commentators continue to predict higher levels of loan sale activity.
In previous years, the purchase of distressed loan portfolios has already proven to be an attractive investment strategy for many investors but in order to achieve returns, a clear understanding of the underlying assets as well as a clear appreciation of the landscape of the countries where the debtors are located are essential, for example in terms of regulation, structuring options, enforcement rights and speed of recovery, any anti-usury laws and tax, to name but a few points.
In this quickly evolving environment, many jurisdictions have responded by implementing temporary extraordinary legal measures, such as national moratoria on enforcement, provisional changes to insolvency regimes and restrictions on the pursuit of debt claims, that still continue to be extended or amended to adapt to the needs of those depending on them to charter a path out of the Covid-19 induced crisis. We also await the outcome of the work of the ECB and ECA on producing standardized criteria and documentation in this area.
In our updated and expanded Guide to Issues for Trades of Non-Performing Loans across Europe and China, we have selected some of the key legal and practical issues to be aware of when conducting an NPL trade in jurisdictions that are strongly anticipated to be key areas of activity. Please contact any of our listed team members if you require further legal advice and insight, want to discuss emerging or pervasive trends, or look at our track record.