A claim under a loan agreement is an asset: the creditor is entitled to the principal, interest and penalties, and this claim can be sold, assigned or contributed to capital. Yet its market value almost never equals the face value of the debt: a performing loan to a solvent borrower with quality collateral trades close to the outstanding balance, while an overdue unsecured claim is worth a fraction of par. Independent loan valuation establishes what a specific loan or portfolio is actually worth on the market — for an assignment, a buyout, litigation or financial reporting.
Loans and portfolios we value
- single loan claims — from consumer loans to facilities extended to large enterprises;
- loan portfolios — from dozens to thousands of positions;
- unsecured (consumer) loans;
- loans secured by land, residential and commercial real estate, vehicles or equipment;
- performing loans and non-performing loans (NPL) at any stage of delinquency.
Claims under commercial contracts (supply, services) are a separate valuation object — see the page on accounts receivable valuation.
When loan and NPL valuation is required
- assignment of claims and sale of loan portfolios;
- buyout of a loan by the borrower from the bank;
- acquisition of a claim by an investor targeting the underlying collateral;
- litigation against the bank or a new creditor;
- IFRS revaluation of portfolios and provisioning;
- sale of assets of financial institutions in liquidation, including at auctions;
- pledge of claims and contribution to charter capital.
Regulatory framework and valuation approaches
Loan claim valuation in Ukraine is one of the few valuation objects governed by a dedicated regulation: the Procedure for Valuation of Claims Arising from Credit Operations, approved by Order No. 866 of the State Property Fund of Ukraine dated 29 May 2017. The Procedure sets the rules for forming homogeneous claim groups within portfolios and the criteria for borrower default and an active market.
The income approach is primary, with discounted cash flow as the key method: cash flows from two sources — contractual payments (principal, interest, fees) and/or proceeds from collateral realisation — are weighted and discounted. The appraiser analyses the solvency of the borrower and guarantors, the servicing and restructuring history, collateral quality and liquidity, and the stage of enforcement proceedings. Where an active market for comparable claims exists, the market approach applies, based on prices of actual assignment transactions.
When valuing a loan means revaluing a plant
A bank cannot take "the business" itself as collateral — so loans to large enterprises are secured by the assets of the entire production cycle: real estate, equipment, production lines, vehicles, supplemented by corporate guarantees. Valuing the claim under such a loan effectively becomes a full revaluation of the enterprise's assets: the claim is worth what actually stands behind it. Our track record includes many such engagements — above all within the portfolios of insolvent banks, where individual loans were backed by major industrial complexes.
Our track record
The largest body of work was performed in 2015–2020 for the Deposit Guarantee Fund of Ukraine — revaluation of loan portfolios of insolvent banks, from unsecured consumer loans to large secured claims. In total, the Kanzas company has participated in the revaluation of portfolios of more than 50 Ukrainian banks, including top-ten institutions. We also handle individual mandates: valuations for a borrower buying out their own loan, for litigation against a creditor, or for an investor acquiring a claim — and it is often the bank itself that recommends our company as the appraiser.
Documents required
- the loan agreement and security documents (pledge, mortgage, suretyship);
- repayment and restructuring history;
- financial information on the borrower and guarantors;
- collateral documentation and any existing collateral appraisal reports;
- court decisions and enforcement records (where available);
- for portfolios — a claims register with loan characteristics;
- client identification documents.
The exact scope depends on the object and purpose and is agreed at a free preliminary consultation.
Questions and answers
Why does a borrower buying out their own loan need a valuation? The price of a claim does not equal the face value of the debt: it reflects servicing quality, collateral and recovery prospects. An independent valuation provides a substantiated market value — a basis for negotiations with the bank and support for the transaction price.
What is a non-performing loan worth? The market value of an NPL is a fraction of par — from single-digit percentages for unsecured overdue claims to substantial values where liquid collateral exists. Only a calculation on the specific loan gives a precise answer.
How does claim valuation differ from collateral valuation? Collateral is property, and its valuation prices a specific asset. A claim is a broader asset: the calculation weighs the borrower's payments, collateral realisation proceeds, and the time and cost of enforcement.
Our team, including appraisers holding international valuation certificates, has valued loan claims for over 20 years — from a single agreement to portfolios of thousands of positions. Every engagement receives an individual approach: we are attentive to the client's situation, meet agreed deadlines and support the report until its purpose is achieved. Contact us by email or messenger to discuss your case and receive a quotation.
