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SCI NPL Securitisation Awards: Contribution to Market Development

Category: ABS NPLs


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Winner: NPL Markets

Over 750 portfolios have now been onboarded to NPL Markets’ one-stop-shop reporting, trading and analysis platform. For its role in improving efficiency across the non-performing loan market, it is the winner of SCI’s award for the best Contribution to Market Development.

These 753 portfolios represent some 700 different banks, investors and servicers and over 4.5 million individual loans across 25 different jurisdictions. The number of loans on the NPLM platform has increased by 120% and the number of users has leapt from under 200 since 1Q21.

The numbers have been augmented significantly over the last year in part due to the new regulatory requirements imposed by ESMA through the European Securitisation Regulation (​Regulation (EU) 2017/2402), which ​established a general mandatory and reporting disclosure framework for structured finance transactions.

Among other requirements, ESMA mandated that disclosure reports for private securitised deals must be published on a suitable website that includes data quality checks, while public securitisations must submit detailed data to a repository.  This requirement was considerably more onerous than what had gone before and its introduction, in September 2020, brought many new clients to the door of NPLM.

The web-based digital platform takes that considerable burden of time and cost away from those who make uses of its facilities. It also allows ESMA to collate more complete data in a timely manner.

But NPLM offers more than a regulatory reporting facility. Clients can also make use of the valuation and analytics, data preparation and the electronic marketplace for the buying and selling of non-performing assets. The erudition of the research provided by NPLM has also been praised by those in the market.

“Everybody starts in one place and they tend to say, ‘I don’t need anything else.’ Then when they see what else we have, like the marketplace or the analytics, then they’ll say, ‘I need that too,’” says Gianluca Savelli, co-founder and ceo of NPLM. As the portfolio is already on the platform, additional onboarding is straightforward and frictionless, he adds.

The analytics facility provides full valuation of entire loan portfolios, single structured finance transactions and also individual securitisation tranches easily and quickly. All services are available on a 24/7 basis, at the push of a button.

Clients choose whether they use the platform on a self-service or fully supported basis. Some start with self-service and then shift to fully supported membership and vice versa, says Savelli - although all tend to use the regulatory and business reporting function on a supported basis, given the mind-bending complexity of the obligations.

In a further manifestation of NPLM’s flexibility, users can also bring an adviser with whom they have an existing relationship onto the platform. “For example, we usually start with only a seller and buyers and we very often end up with several trusted advisors onboarded by buyer and sellers to facilitate the transaction,” explains Savelli.

The capacity to deal with performing assets has also been recently added to NPLM, although the bulk of loans and portfolios on the platform remain non-performing. For example, about 90% of loans in the marketplace function and 80% of loans using the analytics and data preparation functions are non-performing.

However, the split is more balanced in reporting. About 60% of the assets making use of NPLM’s business regulatory reporting capacity are non-performing.

In addition to the automated compliance with regulatory obligations, NPLM will generate investor reports and interactive portfolio summaries. It also provides business plan reporting – both the targeted business plan and the actual business goals attained - and securitisation transaction cashflow modelling.

NPLM is continuing to expand its reach. More asset classes - such as trade finance, specialised assets and project finance loans - are being added to the roster. More complex structures, like highly leveraged loans, are becoming possible, and the number of regulatory jurisdictions covered is being increased.

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