How are NPL sale transactions usually conducted in Thailand?
A. For large portfolios, sales are generally conducted via a sealed auction bid process. It is also becoming apparent that both sellers and buyers are preferring to conduct NPL sale transactions via an Asset Management Company (AMC). While there is no legal requirement to involve an AMC in a NPL transaction, the key benefits of selling to an AMC include tax benefits for the buyer and seller – resulting in a possible higher purchase price for the NPLs – and an automatic right of subrogation for the AMC into an ongoing legal action. AMCs are governed by the Royal Proclamation on Asset Management Company B.E. 2541 (1998). Q. How could the current credit crunch resulting from the US sub-prime crisis affect NPL sales in 2008? A. Independent research by PwC indicates that appetite for Thai distressed debt (and indeed Asian distressed debt) remains high. Still, pricing will likely be affected, as the cost of debt and/or required returns is now higher. This will likely affect the number of pla
