文档介绍：Overview
This chapter discusses the growing role of loan sales and other techniques that can be used to address the control of credit risk in FIs. The use of loan sales is not new and may even involve foreign loans. With development of secondary markets for many types of loans, and securitized variants, loan sales are employed even by relatively small FIs.
Loan Sales
Loan sales have taken place for over 100 years.
Correspondent banking
Small banks selling parts of loans to larger banks.
Participations.
Expansion of loan sales during 1980s.
Due to expansion of HLT loans.
Early 1990s decline in loan sales followed by recent expansion.
Expanding economy and resurgence in M&A’s.
Bank Loan Sale Market
May be sold with or without recourse.
Types of loan sales
Emerging market
Domestic
Traditional short term
HLT Loan sales
Traditional Short Term
Key characteristics
Secured by assets of borrowing firm.
Loans to investment grade borrowers or higher.
Short term.
Yield closely tied mercial paper.
Denominations of $1 million +.
HLT Loan Sales
Key characteristics
Term loans.
Usually senior secured.
Long maturity (often 3- to 6-year maturities).
Floating at rates tied to LIBOR, prime or a CD rate.
Strong covenant protection.
Usually distinguished as distressed / nondistressed.
Web Resources
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Loan Pricing Corporation
Types of Loan Sales Contracts
Participations
Limited contractual control.
Assignments
Currently form bulk of the market (90% +).
All rights transferred on sale of loan.
Normally associated with mercial Code filing.
Complexity associated with accrued interest
The Buyers
Often segmented.
Example: distressed HLT loan buyers generally investment banks, hedge funds, vulture funds.
Inter-bank loan sales in traditional market historically due to branching restrictions.
Foreign banks important buyer of domestic loans
panies and pension funds in long-term loans.
Mutual funds and nonfinancials
The Sellers
Major money center banks, . government and its