Sectors > Top Reports > Lowell Memo 231123

Lowell Memo 231123

Lowell - Refinancing Prospects, Sponsor Options To Expropriate Value From SSNs & Alternative Scenarios. SSNs Recovery Prospects
PUBLISHED: 23 November 2023
PAGES: 173
SUBMARKET: Lowell, Top Reports, Top Reports,


Why Read?

  • Understand Lowell’s prospects of refinancing / Amend & Extend
  • Understand possible strategies for sponsors to expropriate value from SSNs
  • Understand SSNs recovery prospects across a range of scenarios including hypothetical administration and debt restructuring and business run-off scenarios
  • Understand DCF and In-Force plus New Business valuations of Lowell
  • Understand possible magnitude of downside risk to Lowell’s ERC should breakage rates increase and / or one-off settlements decrease relative to ERC modelling assumptions
  • Understand Lowell’s back book all-in net IRRs (after collection activity costs and DP share of other opex) and what these imply for weighted average cost of debt needed for sustainable FCF
  • Understand listed comparables and M&A transaction valuation multiples in credit management services sector and what these imply for Lowell’s valuation

What’s New?

  • Scenario analysis for Lowell to address its debt maturity wall commencing in 2025
  • DCF and In-Force plus New Business financial projections, valuation and sensitivities

Questions Answered

  • How do Lowell’s refinancing prospects compare to when it last refinanced in Q4 20?
  • How have Lowell’s back book all-in net IRRs trended over time and what weighted average cost of debt can it afford to pay in any refinancing?
  • How much possible downside risk is there to Lowell’s ERC and what mitigants are there to this?
  • What impact have ABS issuance and disclosed portfolio sales since Q3 22 had on Lowell’s financials?

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