Challenging valuations

Category: ABS NPLs

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Covid-19 aftermath dogs NPL exposures

The aftermath of the coronavirus crisis is hindering the valuation of properties that back European non-performing loan transactions. Nevertheless, collections have picked up and more NPL ABS issuance is expected.

According to Moody’s, the deterioration in the quality of the valuation of properties underlying securitised exposures in new trades can be ‘’explained by the increased difficulty in carrying out drive-by valuations in the post-coronavirus environment, with many players resorting to less expensive and less complex ‘desktop’ or automated valuations.’’

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