Debt valuation

Due diligence: debt valuation and forecasting

Debt advisory and consultancy case study

The client

Situation

The client was considering investing in a debt purchaser and was seeking an independent expert to help inform their pricing and investment decision

The project

Over four weeks the TDX Group Advisory team used a range of statistical modelling techniques based on the debt purchaser’s existing cash generation, operational information and financing structure to value the portfolio and forecast cash.

They also stress-tested the cash flows under a range of different scenarios to provide likely outcomes.

TDX Group solution

A bespoke Advisory Services engagement to value the debt purchaser’s portfolio

Portfolio valuation process

Base cash collected curve - account liquidation developed based on historic performance
Balance and portfolio level degradation - cash collected flow adjusted for factors that cause payment degradation
Cash flow modelling - Model calculates costs of collection and funding
Funding option analysis - cash flow model calculates maximum price payable

Download

30% uplift on queried accounts

BT chose to use Real Time Query Portal technology for managing external DCA queries

50% increase in monthly collections

In the first year of using PLATO, our client increased average monthly collections by 50% for final debt.

Assessing performance against regulatory requirements

Stress testing recoveries capability against performance and regulatory requirements

Identifying £17 million of potential improvements in recoveries

How we identified potential improvements in recoveries for a global bank