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Global Debt Purchasers Face Increasing Refinancing Risk
Refinancing risk is growing for global debt purchasers as their debt capital market access becomes less reliable, and due to challenges in executing deleverage plans amid pressure on collection rates, Fitch Ratings says. Some stronger debt purchasers have recently accessed the markets, but those with weaker credit profiles or near-term debt maturities may struggle to refinance at an affordable cost. Debt purchasers borrow to fund the acquisition of non-performing loans (NPLs) from banks and other originators at a discounted price, which they then seek to collect at a profit, typically over several years. The sector ... (full story)