Debitos Celebrates Pivotal €10 Billion Milestone, Signalling a New Era in Secondary Debt Market
- Debitos marketplace achieves a landmark €10 billion in pan-European secondary debt transactions.
- Greece and Italy are the largest growth drivers representing almost 76% of all transactions on the platform by GBV
- Current deal pipeline implies further activity of €7.1 billion
Frankfurt – December 15, 2023: Debitos, the leading secondary market for loans in Europe for banks and investors, has closed transactions worth more than €10 billion in Gross Book Value (GBV), marking a significant milestone for the maturity of the European secondary debt market.
The Debitos marketplace for secondary loan sales was launched in January 2012, born out of the long shadow of the global financial crisis, alongside gradual and then rapid technological advances, as well as regulatory changes which incentivised loan sales across credit types, performance status and jurisdiction.
Retail credit transactions dominate
Across the more than decade-long history, the Debitos digitalised marketplace has closed transactions in over 10 discrete credit types. The three largest credit types are all related to retail loans, reflecting the asset class’ deep distress in the period post the global financial crisis, as e-commerce and technology advancements inspired permanent changes in consumer behaviour patterns which disrupted the sector. Around €5.5 billion of transactions on the marketplace were unsecured non-performing retail loans, followed by €1.7 billion in non-performing real estate backed retail loans. In addition, the marketplace has facilitated around €765 million worth of non-performing retail receivables. Together, these top three credit types represent around 79% of all transactions managed on the Debitos marketplace.
In recent years, secondary debt sales on the marketplace have evolved with market dynamics, favouring a broader pool of transactions across a range of credit types and asset classes,With the marketplace facilitating around €2 billion in corporate non-performing credit transactions. These consist of €750 million in corporate bankruptcy claims, €685 million in non-performing receivables against corporates and public entities, and €412 million in non-performing real estate backed corporate loans. In addition, there is also a maturing component of sales of performing corporate credits, with more than €148 million to date.
Innovative Platforms and Geographic Trends
Across all active markets, approximately €3.1 billion in GBV was successfully sold on the doLook platform, a bespoke pan-European non-performing loan (NPL) online marketplace developed by Debitos for doValue in April 2020 to facilitate the entire sale process of secondary debt to specialised operators.
By geography, activity on the marketplace has correlated to where legacy distress was most acute aligned to markets with improved economic outlooks and creditor friendly legal frameworks. Greece and Italy top the jurisdiction leader board, with €4.2 billion and €3.4 billion, respectively, representing 76% of all transactions. Germany came in a distant third with €1.6 billion, which round out the top three markets. Debitos has also closed secondary sales in a further 14 jurisdictions, illustrating the expanding maturity of the secondary debt market.
“Secondary debt sales in Europe have experienced extraordinary growth over the past decade with the Debitos marketplace at the centre of that maturity,” says Timur Peters, founder and CEO of Debitos. “Activity has been dominated by longevity of legacy distress in retail credit both in Greece and Italy, but in more recent years the Debitos marketplace has broadened out substantially, as the universe of investors targeting smaller loans has multiplied. We expect activity to continue to diversify in the months and years ahead.”
Platform Evolution and Services
The Debitos marketplace includes more than 400 of the biggest loan servicers and 2,000 investors registered from 16 different countries. It has evolved over the past 12 months from a pure transactions platform to provide additional intelligence tools and services for vendors and investors. In September 2022, two major expansions were integrated into the platform. Firstly, the Servicing Navigator, connecting debt investors and banks with loan servicers, matching best suited business partners from the Debitos pan-European database of loan servicers. Secondly, the Creditor Coordinator, connecting disparate creditors in widely-held facilities across the spectrum of secondary credit types, overcoming multi-creditor NPL bottlenecks, stimulating transactions and providing improved creditor recoveries for investors and banks. In February 2023, a Centralised Valuation Service was integrated into the Debitos platform, integrating e-valuation reports and supporting return on investment (ROI) and cash flow forecasts, as well as forecasts for purchase price, recoveries and interest debt coverage ratios. In addition, Debitos developed a Data Converter Service which transfers existing data from legacy bank-specific loan data templates (LDTs) into standardised European Banking Authority (EBA) templates, powering analytics potential by alignment with mandatory EBA NPL data templates.
Year-end and outlook for 2024
The transaction pipeline of existing year-end mandates on the Debitos marketplace includes the distribution of loans with a GBV in excess of €7.1 billion. Greece is expected to be the dominant jurisdiction over this period, representing around €3.7 billion GBV, followed by Italy with €2.1 billion GBV. After the big two markets, Spain is following with €750 million and Germany with around €480 million, respectively, as well as an additional €100 million from assorted markets.
About Debitos
Debitos is the leading loan transaction platform in Europe that enables banks, funds and companies to sell their credit exposures on the market through its open and transparent auction-based online transaction platform.
The platform leverages on the digitalisation of the entire sale process and can reduce the expected disposal timing to 3-8 weeks compared to 3-6 months of the traditional process. Debitos was founded in Frankfurt in 2010 and has since successfully transacted more than 900,000 loans in 16 countries. By now, more than 2,000 investors from all over Europe have registered with Debitos.
Timur Peters is the founder of Debitos GmbH. He holds a diploma in finance and law. He has more than 10 years’ experience in the range of finance.
Before Founding Debitos Timur Peters was responsible in the distribution of Software for Banks and Financial Institutions for Comarch for the D/A/CH Region. Next to this he has worked for several years as a self employed Project Consultant in the area of Financing of Litigation cases, Peer2-Peer Credit Marketplaces and other online projects for financial institutions.
Website:
https://www.debitos.com
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