Securitization: Unlocking Value and Reducing Risk

At Kredinor, we work with the securitization of non-performing loans (NPLs). A motive for securitization is that a financial company can sell assets that require capital coverage to someone who is not covered by the requirement (significant capital relief). Another motive is improved risk management. A financial company can move risk exposed receivables that deviate from other receivables. Being able to attract financial and specialized investors for better price is also a motive for securitization.

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Securitization of NPLs is a growing trend in the Nordics and one that Kredinor has experience with. This method offers several advantages.

Why Choose Securitization with Kredinor?

  1. Value Preservation: Secure a better sale price compared to traditional one-off sales,
    maximizing returns.
  2. Capital Optimization: Improve your capital adequacy ratios by converting NPLs into
    securities, leading to a stronger balance sheet.
  3. Increased Liquidity: Enhance liquidity and free up capital for new lending
    opportunities.
  4. Efficient Risk Management: Transfer credit risk to specialized investors, allowing your institution to reduce exposure to risky assets by achieving significant capital relief.
  5. Financial Stability: Reduce the burden of non-performing loans on your balance sheet, also avoiding prudential backstop provision.
  6. Customizable Risk Levels: Securitization allows you to divide NPLs into tranches with
    varying risk levels, possibly maintaining economic interest in portfolio through senior exposure.
  7. Enhanced Transparency: Benefit from the increased transparency and
    standardization that comes with securitization, boosting investor confidence and market
    trust.
  8. Smooth Transition: At Kredinor we have expertise and a SPV structure in place for execution of such transactions.
In summary, securitization of NPLs can contribute to a more efficient management of non-performing loans, improve banks' financial health, stimulate lending and promote economic stability.

Partner with Kredinor for Your NPL Management Needs

Explore how Kredinor can help you manage non-performing loans more effectively, freeing up capital, reducing risk, and enhancing financial stability. Contact us at Sales@Kredinor.se to learn more about securitization and our process.

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