In the context of the COVID-19 pandemic, we are
observing lenders in Australia and globally make provisions for bad
debts arising from actual and forecast adverse impacts. We
anticipate that some overseas lenders will also reduce their
exposure to the Australian market or segments of it, either as a
consequence of focusing on other core markets or because they are
over-exposed to specific market sectors in Australia. These
actions, combined with other negative consequences of the current
pandemic on lenders, mean it is more likely that sales of loan
portfolios in the market will increase as lenders seek to offload
loans.
In this article, we consider the commercial issues that
potential purchasers of loan portfolios should take into account
when weighing up whether or not to put in a bid and discuss the
criteria that will impact on the pricing and terms offered.
