Octane Capital specialises in Western European Non-Performing Loans, insolvency portfolios and special situations, with a particular focus on smaller deals (€5-50m) from small and mid-sized local banks. Unlike larger players, who tend to focus on auctioned portfolios, Octane’s counterparties tend to be proprietary and repeat business from year to year. As such they have an intimate knowledge on the situations developing with local banks across the continent. Here are some key observations on how the COVID-19 crisis is affecting banks, their customers/borrowers and the potential for distressed debt.
In Overview
Post 2008 it was 6 months after the crisis struck that the NPLs started to become available. Post COVID-19 crisis breaking, Octane expect a quicker turnaround eg 3 months, which would mean possibly June/July 2020 for this. Nevertheless one can infer from the substantial comments on the forward pipeline below that attention is very much on new asset origination, which is expected to continue to grow significantly in this opportunity set.
Meanwhile most businesses in the target European markets are still currently trading, being supported by governments, so it’s still too early (April) to tell as to the broad or precise nature and volume of assets that will appear in Octane’s sweet spot, but the team are expecting significant flows.
Existing Assets |
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Operational Impacts |
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New Asset Origination |
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Infrastructure Debt | Sustainable Infrastructure | Renewable Energy | Distressed Debt |