Non-Performing Loans (NPLs) represent a significant challenge to global financial stability, yet they also offer a compelling opportunity for specialized investors and financial institutions. The ability to effectively securitize and manage these distressed assets is a critical skill set in today's economy, enabling banks to clean up their balance sheets and freeing up capital for new lending. This training course provides a definitive roadmap for navigating the complexities of the NPL market, from initial valuation and due diligence to the structuring of sophisticated securitization deals and the implementation of robust asset management strategies.

This comprehensive 10-day program is designed to transform participants into experts in the field of distressed asset management and NPL securitization. The curriculum dives deep into the legal, regulatory, and technical aspects of these transactions, equipping you with the knowledge to identify, acquire, and manage NPL portfolios for maximum recovery and return. Through a combination of theoretical frameworks and practical case studies, you will learn to structure deals that are both resilient and attractive to investors. This course is an essential resource for professionals seeking to master a specialized and high-impact area of finance.

Duration

10 days

Target Audience

• Distressed asset and special situations investors
• Professionals in bank restructuring and risk management
• Analysts and originators of structured finance products
• Legal and compliance officers in financial institutions
• Fund managers specializing in fixed income or alternative assets
• Professionals at credit rating agencies
• Regulatory and government officials
• Consultants advising on financial sector health

Objectives

• Define and categorize non-performing loans and distressed assets.
• Understand the key drivers of NPL accumulation in financial systems.
• Master the process of valuing NPL portfolios using different methodologies.
• Analyze the legal and regulatory frameworks governing NPL transactions.
• Evaluate and structure NPL securitization deals for various asset classes.
• Develop effective strategies for the workout and recovery of distressed assets.
• Assess the role of technology and data analytics in NPL management.
• Critically analyze the risk-return profiles for different NPL investments.
• Synthesize a strategic plan for acquiring and managing an NPL portfolio.

Course Modules

Module 1: The Landscape of Non-Performing Loans

• Defining NPLs and different stages of distress.
• The causes of NPL accumulation in banking systems.
• The economic and systemic impact of NPLs.
• Global trends and the size of the NPL market.
• The role of NPLs in the health of the financial sector.

Module 2: NPL Securitization: A Foundational Overview

• The core concept of NPL securitization.
• Key parties involved in an NPL deal.
• The benefits for banks, investors, and the wider economy.
• The challenges and risks unique to NPL deals.
• A high-level view of the deal structure.

Module 3: NPL Portfolio Valuation and Due Diligence

• Different valuation methods for NPLs.
• The importance of historical loan data and collateral information.
• A deep dive into the due diligence process.
• Using data analytics to project future recovery rates.
• Identifying hidden risks in an NPL portfolio.

Module 4: The Legal and Regulatory Environment

• The role of local insolvency and foreclosure laws.
• Regulatory frameworks for NPL transactions.
• The impact of accounting standards (e.g., IFRS 9).
• The legal transfer of title and ownership.
• Cross-border issues in NPL deals.

Module 5: Structuring the NPL Securitization Deal

• The role of the Special Purpose Vehicle (SPV).
• The structure of the cash flow waterfall.
• The use of different tranches to allocate risk and return.
• The importance of a servicing agreement.
• Designing a deal that attracts different investor types.

Module 6: Credit Enhancement in NPL Deals

• How credit enhancement mitigates risk for investors.
• The use of overcollateralization and subordination.
• The role of reserve funds and excess spread.
• The use of third-party guarantees and insurance.
• The trade-offs and costs of different enhancement methods.

Module 7: Servicing and Management of NPLs

• The critical role of the NPL servicer.
• Strategies for maximizing asset recovery.
• The use of workout plans, restructurings, and foreclosures.
• How to manage the relationship with borrowers.
• Measuring and monitoring servicer performance.

Module 8: Investor Perspectives and Market Dynamics

• Who are the typical investors in NPLs?
• The return expectations and risk tolerance of different investors.
• The secondary market for NPLs and tranches.
• How distressed asset funds operate.
• Global capital flows into NPL markets.

Module 9: The Role of Technology and Data

• The use of AI and machine learning in NPL valuation.
• Predictive analytics for default and recovery rates.
• Digital platforms for portfolio management and reporting.
• Automating the due diligence process.
• The future of FinTech in distressed asset management.

Module 10: Case Study Analysis of Successful Deals

• A deep dive into a landmark NPL securitization.
• The specific challenges and how they were overcome.
• How the deal structure protected investors.
• The role of the servicer in achieving a successful outcome.
• Key takeaways for future transactions.

Module 11: Case Study Analysis of Failed Deals

• A critical examination of a troubled NPL transaction.
• The primary causes of the deal's underperformance.
• The role of flawed assumptions or poor due diligence.
• The impact on investors and the wider market.
• Lessons learned for risk mitigation.

Module 12: Advanced Legal and Tax Considerations

• A deeper look at tax implications of NPL transfers.
• Cross-jurisdictional legal challenges.
• The importance of legal opinions and enforceability.
• Managing litigation risk and legal costs.
• Recent changes in relevant laws and regulations.

Module 13: Stress Testing and Scenario Analysis

• How to stress test an NPL portfolio.
• Modeling the impact of economic downturns.
• The use of different macro-economic scenarios.
• Assessing the resilience of the deal's credit enhancement.
• Interpreting stress test results for investors.

Module 14: Portfolio Management Workshop

• A practical, hands-on session with a hypothetical NPL portfolio.
• Participants will develop a management and workout strategy.
• They will present their plan for maximizing value.
• A discussion on team structure and resources for portfolio management.
• A peer review of different strategies.

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 7 working days before commencement of the training.