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Marlin Financial Group has sealed a multi-million debt purchase deal, rumoured to be the biggest the industry has seen for 18 months, Credit Today can exclusively reveal.
It is understood the deal with one of the UK’s leading banks is in excess of £21m and was completed in a single transaction, according to sources.
The acquired debt portfolio is primarily non-performing consumer loans including credit cards and personal loan debts.
The transaction will fuel hopes that activity is beginning to return in the sector and lenders are more willing to sell debt once again.
One industry expert said: “There certainly are a lot of large deals underway in the market but it is becoming increasingly difficult to secure funding and complete on large transactions.
“This deal shows that you need surety of funding to gain a big portfolio and could send warning signs to smaller firms who don’t have the balance sheets needed.”
Banks and investors shied away from the market after the brink of the recession created volatile pricing conditions which led to ill-disciplined deals and dented profit margins.
The lack of funding by lenders resulted in the market drying up and activity grinding to a halt while sellers and buyers waited for an equalisation in prices.
But this latest deal could stoke a return of activity to the sector. Private equity firm Duke Street Capital snapped up a controlling stake in Marlin earlier this year in a £50m deal which added to the debt purchaser’s buying fire power.
Martin Dunphy, executive chairman of Marlin, said: “We are involved in several large transactions at any one moment and we wouldn’t like to comment on one in particular.”
