Monselesan: NPL management, a different approach today among stakeholders and ratings agencies

The Director of Portfolio Management & NPL Underwriting at Prelios Credit Servicing took part in the Quotidiano Immobiliare online workshop.

What is the state of the art in distressed loans with underlying real assets? The question was discussed on Tuesday June 23 during the online workshop NPLs, UTPs and the distressed loans market in Italy organized by Quotidiano Immobiliare.

One of the webinar speakers was Marco Monselesan, Director of Portfolio Management & NPL Underwriting at Prelios Credit Servicing. “It’s important to make a distinction between pre- and post-Covid emergency with regard to management of distressed loans,” said Monselesan during the live streaming conducted by ilQI's Cristina Giua and Marco Luraschi. “Today there is a different approach to these transactions among stakeholders and ratings agencies, who are particularly attentive to certain key questions. The first is the timing of the recovery, which has to be solid and based on the performance achieved by the servicers themselves in the last few years.”

The second point, Monselesan added, “concerns the valuation of the underlying real estate assets. Today it is more important than ever to have very high coverage in terms of property reappraisal, which in this context has to be up to date. For less granular assets in particular, recovery plans cannot be based on property valuations from 18-24 months ago, because this would undermine the solidity and strength of the business plan produced by the servicer. So it is vital to combine the re-appraisal with a detailed assessment of property values, and to use backtesting analysis.”

As announced on June 17 and 18, Prelios Credit Servicing will act as Master and Special Servicer on two securitization transactions with the Italian State's GACS guarantee. These are the first two public transactions with GACS to be arranged during the Covid-19 emergency and were announced just before the end of the lockdown. The first is the ‘Diana’ securitization completed by Banca Popolare di Sondrio on a distressed loan portfolio with a gross value of 999.7 million euro, consisting 74% of secured loans. The second transaction, completed the following day by the BPER Banca Group, is called Spring and concerns a distressed loan portfolio with a payable gross value of 1.4 billion euro, consisting 57% of secured loans. Spring is the third securitization arranged with the BPER Group after 4Mori and Aqui.