More NewsBank Loan Recovery Rates at Record Lows

Bank Loan Recovery Rates at Record Lows

Bank loans achieved an ultimate recovery rate (value of instruments received at emergence) of only 72% in 2002, the lowest recorded level in Standard & Poor’s LossStats database, which tracks ultimate recovery values back to 1988. Ultimate recovery rates for loans were 73.6% in 2001 and averaged 81.6% for the entire 1988-2002 period, according to Standard & Poor’s. ‘That the recent bank debt recovery results cited above are only 8%-10% below the 15-year mean is a result of banks continuing to structure debt better by getting higher quality collateral, having more debt contractually subordinated to their position, adjusting covenants, and reducing commitment levels earlier in the process,’ said Roger Bos, an Associate with Risk Solutions, Standard & Poor’s risk management unit that administers and analyzes the database. The ultimate recovery rate for senior unsecured bonds was 28% for 2002 after a record low of 22.1% in 2001, both well below the 1988-2002 average of 46%.

Related Articles

Preparing for GDPR? Here’s four things to consider

More News Preparing for GDPR? Here’s four things to consider

3m Elliott Wiseman
Cash flow in focus for investors

Cash Management Cash flow in focus for investors

4m Conor Deegan
Treasury TV: Karen Pugsley, Domino's Pizza Group

More News Treasury TV: Karen Pugsley, Domino's Pizza Group

4m Victoria Beckett
Treasury TV: Yeng Butler compares US and European MMF reforms

Compliance Treasury TV: Yeng Butler compares US and European MMF reforms

4m Victoria Beckett
Treasury TV: Tim de Knegt, The Port of Rotterdam

10 Minutes With The Treasury Treasury TV: Tim de Knegt, The Port of Rotterdam

5m Victoria Beckett
Banks are selling clients short with short dated cash deposit U-turns

Banking Banks are selling clients short with short dated cash deposit U-turns

5m Victoria Beckett
What does sterling’s Brexit boost mean for UK manufacturers?

More News What does sterling’s Brexit boost mean for UK manufacturers?

5m Tasja Botha
FX for corporates: 5 best practices for treasurers

Economy FX for corporates: 5 best practices for treasurers

5m Mateo Graziosi