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Non-Performing Asset Funds to Purchase FTX Bankruptcy Claims

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It is reported that a person familiar with the matter said that non-performing asset funds can purchase FTX bankruptcy claims at a maximum price of 20% in the …

Non-Performing Asset Funds to Purchase FTX Bankruptcy Claims

It is reported that a person familiar with the matter said that non-performing asset funds can purchase FTX bankruptcy claims at a maximum price of 20% in the private OTC market. After FTX, it now owes $3.1 billion to the 50 largest creditors. In some open bankruptcy markets, the transaction valuation of bad FTX assets is about 16% of the claim face value. The individual claims listed for sale on Xclaim, the platform that provides transaction encryption claims, are up to 27 million US dollars. An anonymous FTX creditor said that the pricing of the private OTC market was similar, and the purchase price of the non-performing asset fund was between 15% and 20% of the nominal value of the claim. “Their purchase is expected to receive funds within five years. If these funds finally receive 25% of the money within five years, this is not a good deal, because the annual recovery rate is only about 5%. I think many of these companies are expected to recover funds equivalent to 50% of the face value of the claim.”

Insiders: FTX bankruptcy claims are sold at 20% in the private OTC market

Interpretation of the news:


According to a person familiar with the matter, non-performing asset funds can now purchase FTX bankruptcy claims for a maximum price of 20% in the private OTC market. After being declared bankrupt, FTX owes a total of $3.1 billion to its 50 largest creditors. However, in the open bankruptcy market, the transaction valuation of bad FTX assets is only about 16% of the claim face value.

The individual claims listed for sale on Xclaim, a platform that provides transaction encryption claims, go up to $27 million. An anonymous FTX creditor said that the pricing of the private OTC market was similar, with the purchase price of the non-performing asset fund ranging between 15% and 20% of the nominal value of the claim.

The purchase of these claims is expected to receive funds within five years. However, if these funds only receive 25% of the money within five years, it would not be considered a good deal due to the low annual recovery rate of approximately 5%. But it is believed that many of these companies can recover funds equivalent to 50% of the face value of the claim.

Non-performing asset funds are specialized investment entities that buy non-performing assets from financial institutions and sell them at a profit after recovering the outstanding amounts from the borrowers. These funds usually purchase such assets at a significant discount and then put in efforts to recover the amounts owed to the creditor. Through the purchase of FTX bankruptcy claims, non-performing asset funds are hoping to recover a significant portion of the money owed to the creditors.

In conclusion, the news that non-performing asset funds can purchase FTX bankruptcy claims at a maximum price of 20% in the private OTC market is significant for the investment industry. The purchase of these claims can offer the possibility of recovering funds equivalent to 50% of the face value of the claim. However, since the recovery rate is only about 5% annually, it is crucial for such funds to ensure they are investing in sound debts to secure substantial returns.

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