What is the best structure for selling non performing loans?

There is no universal recipe for taking care of problematic assets in banks. Countries have different legal systems and different traditions and these can weigh heavily on the ultimate solution adopted. Additionally, sources and availability of funding and/or required speed of deleveraging can have a material impact on the solution or results achieved. Nevertheless, a number of important principles have turned out to be valid in most jurisdictions and some of them are presented in brief below.

 

make:

The bank’s in-house restructuring department makes the workout of the distressed debt

itself. Therefore, it requires the necessary knowledge and expertise in form of human capital

 

buy:

The lending financial institution buys the competency for the loan workout. A form of this

option is a joint venture structure in which the bank acquires or co-operates with the

relevant skills, experience and capacities for the debt servicing.

 

- sell:

In a true or synthetic sale transaction the entire portfolio is transferred to investors, which

are mainly opportunity funds or investment banks. This option also encompasses the

transfer of the distressed debt to an external (private or public) servicing platform as well

as the sale of the loans portfolio to a bad bank.

 

 

 Institutions holding nonperforming loans in their portfolios may choose to sell them to other investors in order to get rid of risky assets and clean up their balance sheets. Sales of nonperforming loans must be carefully considered since they can have numerous financial implications, including affecting the company's profit and loss, and tax situations.

Though resheduling is one of the ways to regularise loan but to reduce NPL , it can be sold at reduction method with appropriet provision.
Having permision from Central Bank , the both party exchange it by negutiation bitween them.

Through  WACC CALCULATION YOU CAN IDENTIFY BEST CAPITAL STRUCTURE , any way normally high debt ratio or portion is good for above situation  when intrest  rate is low