In the space of a few weeks a large, burgeoning market that exhibited a waterfall of transactions was confined to a trickle as deals were pulled or left to stagnate as the market was shrouded with the malaise emanating from the pandemic. Indeed, the erstwhile market observer will be aware that there are a number of significant hurdles that the NPL market will need to overcome in order to properly kick start which includes:

• a recalibration of expectations around the bid-ask price
• the ability to quantify the impact of COVID-19 when it comes to the valuation of NPLs
• the availability of debt finance to maximise returns

As was true with the genesis of the European NPL market in the wake of the GFC, these hurdles need to be surpassed and the sooner this is achieved the better for not only the banks but also the respective economies in which they operate. One major difference to the fallout of the GFC, is that securitisation is likely to play a prominent role in the new NPL order. In fact, when you consider securitisation, the NPL market is at a true inflection point.