Die Bewertung notleidender Kredite - 'Distressed Assets'

'Distressed Assets'

Business & Finance, Finance & Investing, Banks & Banking
Cover of the book Die Bewertung notleidender Kredite - 'Distressed Assets' by Chrysanth Herr, GRIN Verlag
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
Author: Chrysanth Herr ISBN: 9783638909068
Publisher: GRIN Verlag Publication: February 4, 2008
Imprint: GRIN Verlag Language: German
Author: Chrysanth Herr
ISBN: 9783638909068
Publisher: GRIN Verlag
Publication: February 4, 2008
Imprint: GRIN Verlag
Language: German

Diplomarbeit aus dem Jahr 2007 im Fachbereich BWL - Bank, Börse, Versicherung, Note: 1.1, European Business School - Internationale Universität Schloß Reichartshausen Oestrich-Winkel, 151 Quellen im Literaturverzeichnis, Sprache: Deutsch, Abstract: This paper explores the price gap between sellers and buyers of distressed corporate debt which impedes the development of the nascent distressed debt market in Germany. After an introductory first chapter, the second chapter lays the groundwork for the further investigation by analyzing the motivations of the two types of market participants, the commercial banks and the distressed debt investors, to trade. It continues by describing the characteristics of distressed debt investors and the investment approaches they take. The third chapter deals with the commercial banks' perspective on distressed debt and their valuation methods. It is shown that banks view corporate debt in light of its inherent risk of default and consequently value loans at par value less specific provisions. Although banks maintain vigorous rating systems to assess the probability of default and the loss given default, they have difficulties specifically valuing distressed corporate debt. Their valuation methods do not incorporate all drivers of debt value and future workout costs and are largely influenced by accounting principles and accounting policies resulting in insufficient provisions and too high price expectations. By contrast, as shown in the fourth chapter, investors view distressed corporate debt as an opportunity to restructure the company and possibly take control with a debt-to-equity swap. They mostly rely on the capital market to exit their investments after a three- to five-year holding period and, consequently, their valuation methods correspond to the capital market. As a result, the author finds that the price gap is a product of the conceptual differences in the view on distressed debt and the applied valuation methods. The problem is exacerbated by the information asymmetries between banks and investors which lead to price discounts. The author suggests banks value their distressed debt similar to the capital market in order to report fair values of distressed corporate debt and calls on accountants and supervisors to encourage such a behavior. A more market driven valuation will foster the development of distressed debt trading and thereby reduce bulk risks and stabilize the entire banking system.

View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart

Diplomarbeit aus dem Jahr 2007 im Fachbereich BWL - Bank, Börse, Versicherung, Note: 1.1, European Business School - Internationale Universität Schloß Reichartshausen Oestrich-Winkel, 151 Quellen im Literaturverzeichnis, Sprache: Deutsch, Abstract: This paper explores the price gap between sellers and buyers of distressed corporate debt which impedes the development of the nascent distressed debt market in Germany. After an introductory first chapter, the second chapter lays the groundwork for the further investigation by analyzing the motivations of the two types of market participants, the commercial banks and the distressed debt investors, to trade. It continues by describing the characteristics of distressed debt investors and the investment approaches they take. The third chapter deals with the commercial banks' perspective on distressed debt and their valuation methods. It is shown that banks view corporate debt in light of its inherent risk of default and consequently value loans at par value less specific provisions. Although banks maintain vigorous rating systems to assess the probability of default and the loss given default, they have difficulties specifically valuing distressed corporate debt. Their valuation methods do not incorporate all drivers of debt value and future workout costs and are largely influenced by accounting principles and accounting policies resulting in insufficient provisions and too high price expectations. By contrast, as shown in the fourth chapter, investors view distressed corporate debt as an opportunity to restructure the company and possibly take control with a debt-to-equity swap. They mostly rely on the capital market to exit their investments after a three- to five-year holding period and, consequently, their valuation methods correspond to the capital market. As a result, the author finds that the price gap is a product of the conceptual differences in the view on distressed debt and the applied valuation methods. The problem is exacerbated by the information asymmetries between banks and investors which lead to price discounts. The author suggests banks value their distressed debt similar to the capital market in order to report fair values of distressed corporate debt and calls on accountants and supervisors to encourage such a behavior. A more market driven valuation will foster the development of distressed debt trading and thereby reduce bulk risks and stabilize the entire banking system.

More books from GRIN Verlag

Cover of the book Die Entwicklung der Ultrabewegung by Chrysanth Herr
Cover of the book Die Alfred-Krupp-Jubiläen: 200. Geburtstag und 125. Todestag by Chrysanth Herr
Cover of the book Jugend im Kontext von Individualisierung und sozialer Kontrolle by Chrysanth Herr
Cover of the book Potenzen und Grenzen fremdsprachlichen Lernens in der Grundschule - dargestellt am Beispiel der Konzepte des frühen Fremdsprachenunterrichts und der Begegnungssprache by Chrysanth Herr
Cover of the book Die steuerliche Haftung des Betriebsübernehmers by Chrysanth Herr
Cover of the book Offenbarungskonstitution by Chrysanth Herr
Cover of the book Reading the Booker Prize. The Booker Prize and its Impact on the UK Publishing Industry, with a Focus on Small Independent Publishers by Chrysanth Herr
Cover of the book Auswirkungen von 'Effektiven Mikroorganismen' (EM) in gartenbaulich genutzten Böden by Chrysanth Herr
Cover of the book Umweltverbände und ihr Einfluss auf die Organe der Europäischen Union by Chrysanth Herr
Cover of the book Die südostasiatische Staatengemeinschaft ASEAN. Ein Überblick und aktuelle Entwicklungen by Chrysanth Herr
Cover of the book Häusliche Gewalt. Übersicht und Präventionsmassnahmen by Chrysanth Herr
Cover of the book Die Theodizee: einige Lösungen des Problems by Chrysanth Herr
Cover of the book Fachgerechtes Eindecken eines 3-Gänge-Menüs (Unterweisung Restaurantfachmann / -fachfrau) by Chrysanth Herr
Cover of the book The Administrative and Jurisprudential Challenges Affecting the Collection of Zakat by a State by Chrysanth Herr
Cover of the book Stress reduction through joy of life. The salutogenesis model by Aaron Antonovsky by Chrysanth Herr
We use our own "cookies" and third party cookies to improve services and to see statistical information. By using this website, you agree to our Privacy Policy