Its size is equal to the amount of funds that the pledgee will receive when selling the pledged property in fixed time, including coverage of additional costs.
This concept is actively used in lending, but it is not enshrined at the legislative level. Accordingly, there is no clear methodology for determining the collateral value, in most cases it is calculated by each credit institution independently, based on internal methods and rules.
Determination of the collateral value
Collateral is one of the most reliable forms of collateral and is actively used in lending. A movable can act as a pledge, real estate, intellectual property and other liquid property.
The procedure for determining the collateral value is not spelled out in the legislation. This means that it is determined by the parties independently and spelled out in the contract. In practice, the lender makes an assessment independently; in some cases, third-party expert appraisers may be involved.
The amount of the collateral value should provide compensation for damage to the lender in case of default by the borrower of its obligations. Therefore, banks include in it all sorts of risks, costs that may arise in the future when selling collateral.
Collateral discount
Collateral value is closely related to market value, but they have certain differences. The difference between the collateral and market value is called the collateral discount. When calculating it, take into account:
- the amount owed to the creditor;
- the amount of taxes and fees that will need to be paid upon (after) the sale of the collateral;
- fare;
- court expenses;
- other expenses related to the sale of the pledge.
In practice, each lender has its own templates for determining the discount. For example, with a mortgage, the discount is on average 20-30%, with a loan secured by equipment - 40-60%.
When determining the collateral discount, it is important to maintain a balance. On the one hand, the lender should strive to increase its size, thereby minimizing the risks of selling the collateral. But on the other hand, competition in the lending market does not allow him to do this. If the bank underestimates the collateral and gives preference to a high collateral discount, then this will scare away customers.
Nuances
The collateral value is more of a formal concept. It does not coincide with the sale price of the pledged property, since it takes into account certain risks and additional costs associated with the sale.
The Bank cannot fully consider the market conditions and circumstances that may arise in the future. Therefore, in practice, the collateral value cannot always cover the losses of the lender. It is advisable to sell collateralized property at a collateral value in a number of cases:
- the amount owed, including interest and penalties, is significantly lower than the collateral value;
- the sale of property is carried out to a structure that is associated with the bank or is subordinate to it, while the market price of the asset has increased since the conclusion of the pledge transaction.
The issue of determining the collateral value is currently important and relevant. The pledgee must develop and maintain a balanced policy in this direction in order to minimize risks and get the effect of conducting pledge operations. Also relevant is the issue of consolidating the essence and principles of determining the collateral value in the legislation.
Any property offered as collateral must undergo an appraisal of its value and the determination of the amount of the loan provided against the collateral. The appraisal of the property that is offered to the bank as collateral for the loan can be carried out by specialists in pledge work in the bank, the relevant specialists of the credit department who carry out the appraisal of the property, expert consultants and appraisers hired by the bank on a contractual basis to carry out the examination of the property, as well as independent appraisers and appraisal companies are subjects of appraisal activities that have an appropriate certificate or license to perform appraisal work, giving the right to conduct an independent appraisal. In the process of assessing property, as a rule, three types of value are determined: market, collateral and liquidation.
Market value - the cost for which the possible alienation of the object of appraisal on the market of similar property on the date of appraisal under an agreement concluded between the buyer and the seller, after carrying out appropriate marketing activities, provided that each of the parties acted competently, prudently and without coercion.
Liquidation value - the value that can be obtained on condition of the sale of the object of appraisal in a period significantly shorter than the exposure period of such property, during which it can be sold at a price that is equal to the market value.
Collateral value - the discounted market value of the property as of the valuation date, determined as of the stipulated expiry date of the pledge agreement for the purpose of concluding a property pledge agreement.
Figure: 8.3. in The procedure for assessing property provided as collateral for the bank
depending on the requirements of the borrower or the bank, the subject of the appraisal activity during the appraisal may determine one or several types of value (market, market and collateral, market and liquidation). In conducting an independent appraisal, it is mandatory for a bank (branch) to determine by the subject of appraisal activities two types of property value offered as collateral - market value and collateral (liquidation).
The general procedure for assessing the property provided to the bank as collateral may be as shown in Figure 8.3.
In banking practice, the real value of the pledged property, as a rule, should not be less than the size of the loan and the costs associated with the execution of the loan agreement, pledge agreement, and the like. The required amount of collateral for each credit transaction can be determined by the formula:
where S3ab is the amount of collateral;
Sosz. - part of the collateral amount at the collateral value in the form of the main collateral;
Sdod. 3. - part of the collateral amount at the collateral value in the form of additional collateral.
The main collateral is the collateral that secures the loan. At the same time, the bank can add to the main collateral:
Residential and non-residential buildings;
Enterprises as integral property complexes;
Equipment;
Goods (raw materials, semi-finished products, components, finished products, etc.);
Vehicles;
Property rights to the borrower's funds placed on a deposit account with a creditor bank;
Legal and individualscovered by funds deposited with the creditor bank;
Prospective construction in progress with at least 95% readiness;
Other values \u200b\u200bdefined by the bank.
Additional (secondary) collateral is a collateral that is used to replenish the main collateral and compensate for its weaknesses. A banking institution may introduce additional collateral:
Agricultural real estate (with the exception of cases of pledging integral property complexes);
Harvest of future periods;
Cattle (animals that are raised and fed);
Computer, household and office equipment, as well as other values \u200b\u200bdetermined by the banking institution.
When determining the total amount of collateral accepted by the bank, the ratio (in percent) between the main and additional collateral is established, which in total give 100%. At the same time, it is also determined how many times the main and additional collateral must exceed the amount of the loan provided. The structure of collateral can be determined by the bank depending on the financial condition and the borrower's class according to the reliability rating. Under such conditions, the collateral structure will be as follows (Table 8.1).
Table 8.1. in
Determination of the collateral value of the property is carried out by the bank and the borrower, taking into account the conclusions of an independent expert assessment, recorded in the expert examination report. At the same time, the collateral price may be less than the price determined by the expertise, since the bank can provide for the peculiarity of the influence of market factors and costs associated with the sale.
Property that is pledged to a banking institution, as a rule, is subject to insurance at the collateral (liquidation) value in favor of the bank for the entire duration of the loan agreement. In addition, an additional period (month, quarter, etc.) may be envisaged in case it is necessary to foreclose on the pledged property, if the borrower does not return the loan funds and interest for using them.
When the borrower repays part of the loan under the loan agreement (one-time term loan or non-compliant credit line), the bank may reduce the amount of collateral by the amount of the decreasing discount. Moreover, such a condition should be reflected in the pledge agreement.
If the pledge agreement provides for the possibility of reducing the amount of collateral, then the discount is calculated according to the formula:
where CKpog. - the amount of the repaid loan under the loan agreement;
K - the amount of the loan under the loan agreement.
To assess the value of the shares pledged, the following documents are submitted to the bank in relation to the pledged item (shares):
1. When lending to a borrower secured by his own issue shares:
A document certifying the ownership of the borrower (or his property guarantor) to shares (certificates of shares, extracts from the registers of owners of registered securities). In this case, the original document remains in the bank (branch) and is attached to other documents specified in this paragraph (if the subject of the pledge are shares issued in documentary form, the share certificate is returned to the owner after the borrower fulfills the terms of the loan agreement or in case of refusal to issue a loan);
Registrar's certificate on tariffs for the implementation of registration services;
Notarized copies of the constituent documents of the issuer (in the case when the borrower is not a client of the bank);
Decision protocol general meeting shareholders or other executive body of the company (provided that the issuer's charter provides for the possibility of executive body such decisions) in relation to the pledge of shares.
2. When lending to a borrower secured by shares of other issuers:
A document certifying the ownership of the borrower (or his property guarantor) to shares (certificates of shares, extracts from the registers of registered securities owners). In this case, the original document remains in the bank (branch) and is attached to other documents specified in this clause of shares (if the subject of the pledge is € shares issued in documentary form, the share certificate is returned to the owner after the borrower fulfills the terms of the loan agreement or in case of refusal to issue a loan) ;
Information about the registrar (his legal address, telephone and fax numbers, as well as the number and date of issue of the Permit for maintaining the register of holders of registered securities issued by the State Committee for Securities and Stock Market are indicated);
Notarized copies of certificates of registration of the issue of shares of the issuer with the SSMSC;
Registrar's certificate on the tariffs for the implementation of registration services.
When granting a loan secured by shares, banking institutions may determine lists of criteria for selecting investment-attractive enterprises, whose shares can be used by the bank as collateral for lending (Appendix 33). At the same time, banks can put forward conditions regarding non-recommended or prohibited collateral. For example, it may not be recommended to accept as collateral shares in which the issuer maintains the registers of holders of registered securities, and it is prohibited to accept shares encumbered with obligations.
The valuation of the pledged shares is carried out by the bank on the basis of an approved internal methodology. At the same time, banking institutions carry out:
1) estimates of the collateral value of shares that have quotations on the organizationally registered stock market of Ukraine;
2) assessing the collateral value of a block of shares that are not actively traded on an organizationally registered stock market.
Assessments of the collateral value of shares that have quotes on the organized stock market are made based on the analysis of their market value, which is determined by the results of trading in trading information systems (OTC Stock Trading System (PFTS)) and on stock exchanges.
The implementation of the method for evaluating shares on the basis of their market (exchange) value involves the performance of three independent calculations:
1. Calculation of the value of one share based on the average price and purchase over the last 180 days. When using this method, the calculation of the average purchase price of a share is carried out on the basis of statistical data on the volumes of concluded transactions in monetary and quantitative terms on the organized stock market.
The average purchase price of one share over the past 180 days is determined by the formula:
where Price is the average purchase price of one share for the last 180 days (games);
Si - trading volume for these shares for the first day (UAH);
Qi - trading volume for these shares for the first day (units).
2. Calculating the value of one share based on the average purchase price over the last 30 days. In this case, the average purchase price of one share over the past 30 days is determined by the formula:
where Izo is the average purchase price of one share for the last 30 days (UAH);
5 / - volume of trades in these shares for the third day (UAH);
(), is the trading volume for these shares for the first day (pcs.).
3. Calculation of the value of one share based on the average purchase price for the last day when such a transaction was carried out on an institutionalized stock market. To calculate the cost | a block of shares based on the average purchase price for the last day when such a transaction was recorded in the PFTS, the following formula is used:
where is the average purchase price of one share on the last day when such a deal was recorded on the PFTS (UAH);
5 / - trading volume for these shares for the first day (UAH);
Qi - trading volume for these shares for the first day (pcs.).
The number of transactions that are taken to calculate the average purchase price of shares for 30 days can be, for example, at least 4, and the number of transactions that are taken to calculate the average purchase price of shares for 180 days can be at least 20.
Provided that the number of real transactions is less than 4 (20). or the last share transaction took place more than 10 days before the valuation lats, then along with the calculation of the average purchase price of shares, the income and balance sheet valuation methods are used. In this case, the lowest price is taken to calculate the estimated cost of the package.
The value of the block of shares, which is pledged to the bank, is determined by the formula:
where VPa is the estimated value of the block of shares (UAH);
Ts is the smallest of Zuo's estimates. Qiyu. Ts, (UAH);
K - the number of shares pledged (pcs.);
If its shares are not listed in the stock market, or the necessary conditions regarding the number of real transactions are not met, then income and balance sheet valuation methods must be used to calculate the average share value.
To assess the collateral value of shares that are not actively traded on an organizationally registered stock market, the following are used in u:
1. Method of profitability.
Estimating the value of a block of shares using this method provides for an analysis of the volume of annual profit, net of income tax, received by the company during the last two years and for the last accounting period from the beginning of the current year.
Determination of the estimated value of the block of shares is carried out according to the formula:
where VPp is the value of the block of shares by the method of profitability;
Бп - the estimated value of the average annual income for the previous two years and for the last accounting period from the beginning of the current year minus income tax (UAH);
С - capitalization rate;
P is the size of the share of the block of shares in the authorized capital of the business entity, which is pledged to the bank.
The estimated value of the average annual profit (BP) is determined by the formula:
where Bzp is the profit of a business entity for the last accounting period from the beginning of the current year minus income tax (UAH);
l ^ -v - the number of quarters in the last accounting period from the beginning of the current year;
BPI - profit of a business entity for the previous year minus income tax (UAH);
Бп2 - profit of a business entity for the year preceding the previous year, minus income tax (UAH);
The capitalization rate (C) reflects the return on investment in the shares of the specified open joint stock company.
If the estimated value of the average annual profit of the enterprise (BP) is negative, then the estimated value of the block of shares is not carried out using the profitability method.
2. Balance method.
The calculation of the value of a block of shares using this method reflects the price of shares of an open joint-stock company, based on the book value of its assets and liabilities based on the company's balance sheet data for the last reporting period:
where VPb is the value of the block of shares determined by the balance method;
B1 - book value of fixed assets less their depreciation (UAH);
Therefore - the book value of current assets (equal to the sum of the second and third sections of the asset of the balance sheet of the enterprise) (UAH);
K - the cost of accounts payable (UAH);
D - bad accounts receivable (UAH);
P is the share of the block of shares in the authorized capital of the issuer.
After calculating the value of the block of shares using the yield method and the balance method, it is necessary to select the smallest value, which will be used in the future as the value of the estimated value of the block of shares pledged as collateral.
Based on the determination of the value of the block of shares that is provided as collateral, the banking institution calculates the amount of the loan that can be issued against the security of shares. In this case, the estimated value of the block of shares obtained as a result of the calculation carried out by the indicated methods is the amount of the pledge.
For the bank to make a final decision on granting a loan for the amount specified by the borrower, the declared loan amount must meet the following requirements:
a) if the collateral is the shares of enterprises that are included in the first level of the PFTS listing, the calculation of the loan amount is carried out according to the formula:
where 5cr. - the amount of a possible loan and interest;
OP - the amount of the subject of the pledge, determined by the method of the average market (exchange rate) value of the shares (UAH);
0.5 is a correction factor that takes into account the bank's possible costs in the sale of pledged property, the risk of depreciation of shares.
b) if the subject of pledge is shares of enterprises that are included in the second and third levels of the PFTS listing or that are not actively traded on the stock market (not included in the PFTS list), the loan amount is calculated according to the formula:
where Z "cr is the sum of a possible loan and interest;
OP - the amount of the subject of the pledge, determined by the method of the average market (exchange rate) value of shares or by the method of determining the pledged value of shares that are not actively traded on the stock market (UAH);
0.25 is a correction factor that takes into account the bank's possible costs in the sale of pledged property, the risk of depreciation of shares.
If the amount of the loan, for which the borrower applied, and the interest on them, does not meet the specified requirements, then the amount of the collateral must be increased.
An employee of the relevant department of the bank, in accordance with the established methodology, conducted research on the value of the block of shares, draws up a written opinion on the results of the assessment. It must contain the following information:
Full name of the issuer whose shares are pledged, their form of issue, type and category, par value;
Information about the registration of shares in the SSMSC (number and date of registration, the SSMSC body that carried out the registration);
The number of shares in the package, their share in the authorized capital;
Priority of shares pledged over shares of other issues of the issuer (for preferred shares);
Availability of quotes on the organized market, the average price of transactions in shares for the last 180, 30 days and the last transaction price in shares;
Calculation of the value of the block of shares pledged as collateral and the possible amount of the loan that can be issued to the borrower (the results of calculating the estimated value of the block of shares are attached to the conclusion and is an integral part of it);
Reasoned conclusions regarding the factors that may affect the value of the stake, and the projected estimate of the value of shares for the next period (month, quarter, six months).
A written opinion on the results of the assessment of the value of the block of shares, signed by the head of the relevant division, is sent to the credit department of the banking institution for making a final decision on the grant of a loan.
The appraisal of real estate as collateral should take into account the following aspects:
1. The expected sale price of the property is determined, which may differ from the actual market price. When determining the value of the collateral, you need to take into account its long-term properties and income, which can bring the collateral for the normal operation of any owner. One should not take into account the volatile factors that can increase the present value (speculative reasoning, the subjective interests of an individual, and the like).
2. The subjects of crediting are primarily interested in the sale price of the collateral as of the date of possible foreclosure, and not only on the date of the loan agreement.
3. The security price is always lower than the expected sale price. As a rule, it is 50-80% of the selling price. The decrease in the collateral price in comparison with the sale price is aimed at ensuring sufficient liquidity of the collateral in the event of its forced sale.
4. A banking institution must be an obligatory participant in the determination of the collateral price.
5. The collateral price can be determined with or without VAT. For convenience, it is advisable to use prices without VAT, from which, if necessary, you can easily switch to prices with VAT.
Assessment of the value of real estate objects can be carried out using the following methods:
1. Method of cost of income.
According to this method, the price of a property is determined as the value of the possible income (rent, profit) that the owner of this property will receive. Due to the fact that the value of real estate in this case is determined by capitalizing the expected income from it, this method is also called the method of capitalized income.
When calculating the price of an item using the cost of income method, it is determined whether the income is lifetime or temporary. Lifetime income is provided by objects that do not have a specific period of use (for example, land plot). Temporary income is brought by objects with a certain period of use (for example, perennial fruit plantations).
The price of an object that brings lifetime income is based on the ratio of the possible annual income from the object to the corresponding discount rate (capitalization rate). Possible income is the normal income that can be obtained when using the appraised property for its intended purpose, after deducting taxes and other possible expenses that the recipient of income is obliged to bear in accordance with the current legislation and contracts related to the use of the appraised property.
The discount rate is determined as a possible deposit rate, reduced taking into account the tax on deposit income in accordance with the current legislation and adjusted to take into account the balance of risks associated with the deposit of funds and the use of the object of assessment for its intended purpose. Other methods of determining the discount rate may be used for appropriate justification.
The basis of the price of an object that brings temporary income is the discounting (calculation of the present value) of possible annual income from the object during its future use, as well as the residual (liquidation) value of the object, taking into account the costs of liquidation.
2. Comparative value method (sales comparison method).
According to this method, the value of a real estate object is determined based on comparison with the actual market prices for similar real estate objects with a similar purpose, which differ among themselves according to certain characteristics. Such signs can be both internal (household plots can differ in fertility, ecological state, relief, configuration), and external (presence or absence of encumbrances, different conditions for the placement, use or sale of objects). If this method is applied, appropriate adjustments to actual market prices are required.
3. Method of determining the cost based on costs (cost method).
Under this method, the value of a property is determined by taking into account the actual costs incurred by the owner of the property for its creation or acquisition, less depreciation. The expenses incurred by the owner are documented. If the owner of the object is obliged to maintain accounting records in accordance with the current legislation, the object can be valued at its balance sheet residual value, as reflected in the financial statements. The value of the property is indexed for inflation. A variation of the cost-based costing method is a method that involves an appraiser calculating the possible cost of creating an object at current prices, after deducting depreciation.
It should be noted that the listed methods of appraisal of real estate objects are mainly used in combination. But depending on the selected object of assessment, they can have a different status: one is elected as the main one, and the others are auxiliary. An exception is the situation when estimation is possible with only one method (Table 8.2).
Table 8.2. in property valuation
The method of cost of income is the main one when evaluating objects, the creation or acquisition of which is carried out in order to obtain profit (rent). Such objects include enterprises and their structural subdivisions as integral property complexes; agricultural land intended for the production of marketable products; other profitable land plots; profitable buildings and structures. At the same time, the cost of income method is the only method for assessing profitable land plots in the absence of evidence and sufficient information about their transaction. Other methods of evaluating profitable objects can be used as auxiliary ones.
The comparative cost method is the main one when evaluating objects that are not used or objects, the profitability of which is not decisive. Such objects include individual houses and private apartments; household plots; land plots allotted for individual residential development; country houses and plots. In addition, the comparative cost method is the only method for evaluating landless land plots. It can also be used as an aid in evaluating profitable objects.
The cost-based costing method can be used to value human-made objects as primary (or secondary). An exception is the assessment of man-made objects that are not used, in the absence of information about their transaction: in this case, the cost-based costing method is the only one.
If the main valuation method is the cost of income method, the auxiliary method is used the comparative cost method, and if it is not possible to use it, the cost-based method of determining the value. If the main valuation method is with the comparative cost method, the cost-based costing method is used as an auxiliary one.
With minor deviations between estimates determined by various methods (the deviation of the estimate determined by the auxiliary method does not exceed 10% of the estimate determined by the main method), the further evaluation procedure is as follows:
If the main method is the cost of income method and the monetary value of the object, determined by this method, is lower than the estimate determined by the auxiliary method, the estimate determined by the main method is taken, and if the estimate determined by the main method is higher, then the average of the two is determined. estimates,
If the comparative cost method is the primary method, the valuation determined by this method is used.
If the deviations between the estimates are more than 10%, the results of the assessment for both methods are subject to additional verification for their validity.
On the basis of each of these methods, various methods of real estate appraisal are being developed. When determining the sale price, the future purpose of the object is taken into account (for example, the estimated land plot is intended for the production of agricultural products or is allocated for individual housing development). Sales prices can be determined as current (at the valuation date) and prospective (determined at a specified future date).
When analyzing the assessment results, you should also pay attention to the fact that these results should correspond to the range of prices (rent) for similar properties in the region. Information about prices for real estate can be obtained from the following sources: consultations with real estate firms; regional real estate publications and mass media; auctions and open tenders; Internet and stuff.
Banking institutions do not always use the services of independent appraisal companies. In this case, they assess the security item on their own. It is known that many banks have sufficiently qualified appraisers on their staff. The creation of a bank's own collateral assessment department has a number of both advantages and disadvantages. In particular, the benefits include:
The possibility for the borrower to influence the assessment result in order to overestimate it is practically excluded;
There is an opportunity for a competitive advantage over other banks, since at the stage of consideration of the application, the potential borrower does not bear the cost of assessing the collateral;
In parallel with the assessment, bank employees can determine the liquidity of the collateral.
Among the disadvantages should be highlighted:
The costs of maintaining an appraisal department are in most cases higher than the regular involvement of an independent appraisal company;
All costs of assessing the collateral are borne by the banking institution. Banking practice shows that not all banking
institutions are satisfied with the cooperation with appraisal companies and the reports provided by appraisers are, in most cases, checked by bank employees.
When banks and appraisal companies interact, the following problems may arise:
1. Decency of the appraiser.
The potential borrower (it is he who, in most cases, acts as the customer of the appraisal) is interested in the appraised value of his property being maximized. The banking institution is not satisfied with this approach, since in the event of default on the loan, it will have to repay the losses by selling collateral. Due to the overestimation of the collateral value, the amount of the loan provided will be higher than the real value of the collateral, and the likelihood that the bank will be able to cover its losses for such a loan is low.
This problem is caused by a conflict of interests between the borrower and the bank, since the first is interested in the maximum amount of the loan for the minimum collateral, and the second is in the fact that the proceeds from the sale of the collateral cover the borrower's debt. To solve this problem, the banking institution must independently select the appraisal companies, the reports of which it can trust. At the same time, appraisers should understand that their client is a banking institution (although the borrower pays for appraisal services) and there is a possibility of losing her as a client who supplies orders for appraisal.
2. Competence of the appraiser.
Overestimation of the appraised value may also indicate errors in the activities of the appraisers. The essence of this problem lies in the low professional level of appraisers or negligent attitude towards their work. This problem can be solved by testing evaluators for their professional fitness. At the same time, it is possible to create a narrow circle of appraisal companies accredited by the bank, which will be checked for the professionalism of employees.
3. Informativeness of the assessment report.
The reason for the lack of information in the reports of the appraisal companies, as a rule, is the insufficient participation of the banking institution in the setting of the appraisal objectives. Banks should participate in the conclusion of an assessment agreement, and they will be able to clearly define and include all the necessary questions for assessing the cost of the subject of providing assessment tasks.
Thus, among the main conditions for the joint work of the bank and the appraisal company, the following should be distinguished:
The need to form a pool of accredited appraisal companies, which the banking institution will entrust to the appraisal of collateral. At the same time, it is possible to announce a competition for the selection of an appraisal company, setting certain selection criteria (for example, work experience in the market for at least three years, the presence of highly qualified specialists). In the process of choosing an appraisal company by a bank, attention should be paid to the quality of the appraisal, as well as the cost of the services provided and the speed of their provision;
The need for regular checks of accredited appraisal companies for decency and competence;
Conclusion of a tripartite agreement for the assessment of collateral, which must provide for all the necessary requirements of the bank for the assessment report.
So, before drawing up a security agreement and carrying out the procedure for granting a loan, a banking organization must determine the value of the property that is being pledged, and the adequacy of this property to the amount of the loan provided. In case of insufficient value of the collateral offered by the borrower, banks may require the provision of additional guarantees loan repayment.
Nikolay Volkhin A chapter from the book “Pledger. All about bank pledges from the first person "
Publishing house "Mann, Ivanov and Ferber"
Taking into account the unwillingness of the owner of the goods to pay increased fees and the task of the customs service to ensure the payment of duties on the real value of the goods, it can be assumed that the value declared in the CCD is close to the market value. If we ignore the possible cases of distortion of value due to the corruption component and fraud, then the CCD as a source of information can be used by the pledge service. However, when using a customs declaration, it should be borne in mind that the customs value may include: remuneration to intermediaries, costs of packaging / packaging / insurance, transportation costs, licensing fees.
The given sources of information on the market value of the property can be used by the mortgage service subject to the above restrictions. The most correct source of information is "external sources of information", that is public offers in mass media. The possibility of online quotation and price correction based on the entire pool of offers allows us to assert: in this case, the generated value will be the market value. In this case, the conditions for the formation of value should be taken into account.
Delivery conditions
When assessing property on the local market, it is necessary to understand the conditions for the formation of prices announced by market participants. This can be the price on the terms of self-pickup from the territory of the manufacturing plant outside the borders of the Russian Federation, or the price taking into account all fees and payments at the border of the Russian Federation, or the price of property on the site of a local market participant, taking into account delivery to the final consumer. The rights and obligations of the parties under the contract of sale in terms of the terms of delivery of property at the international level are fixed in Incoterms 2010 (Incoterms 2010). These are international rules recognized by government authorities as the interpretation of the most applicable terms in international trade. Knowledge of the basic terms of Incoterms 2010 will allow the collateral to talk with market participants on the same level.
Price system
The dependence of the value on the number of units of property is interpreted by market participants in the system of wholesale and retail prices. The idea of \u200b\u200bthe property price, which is voiced by the market participant, should be analyzed in terms of whether it is a wholesale price or a retail one. If the bank levies foreclosure on the pledge, the costs of selling the property in separate copies and in a single lot will be different. Therefore, the pledger must take into account the dependence of the cost of a single copy on the number of property units in the nomenclature item.
When interviewing a source of information, the question of the availability of a system of discounts is also being worked out. If the influence of the system of discounts adopted in the market on the subject of assessment is revealed, this dependence should also be taken into account when calculating the cost.
Cost components
The price indicated by market participants or indicated in the purchase and sale agreement may include not only the price of the object of the proposed transaction, but also the price of additional services, for example, post-warranty service, insurance, personnel training, repairs, additional parts, etc. property rights to the subject of the pledge, not only the cost is studied, but also the composition of the property and services given in the specification to the contract. When levying a foreclosure, the bank will not be able to sell the service component, therefore, it will not take it into account in the value of the collateral.
The complete set of machines, equipment, ships varies even within the same series. The owner can independently upgrade the equipment. These improvements are not recorded in the technical documentation, legal foundation documents and in the pledge agreement. When evaluating such collateral, the bank will proceed from the basic configuration.
Pledger vs. independent appraiser
Moving on to the technology for evaluating collateral, we must discuss the difference in the work and tasks of an independent evaluator and collateral. To debunk stereotypes, I will immediately indicate that the overwhelming majority of the collateralisers are former independent appraisers or at least people with higher education in the field of appraisal.
The main difference is in the final product. The work of an independent appraiser ends upon the determination of the cost and preparation of the appraisal report, while the cycle of work with collateral ends when the loan product is repaid. It is important for the collateral that the delta in the value of the collateral at the initial assessment and in the event of its forced sale was minimal, thus confirming the competence of the collateral.
The term for the preparation of an opinion on the assessment of the collateral by the pledge is 2–4 working days. This is a bank conveyor, and it makes no difference whether the collateralist prepares an opinion on the assessment of several pieces of equipment or a gas processing plant. In its conclusion, the collateral, in addition to calculating the cost, must provide a legal analysis of the collateral, determine the associated risks and liquidity of the collateral. The bailiff prepares 3-6 such conclusions per week. The model of a bank operating with its own collateral service is more economically profitable than outsourcing the collateral assessment. Independent appraisers are hired by banks to assess mass and standard types of collateral (mortgage), in the event of potential disputes with the mortgagor (business valuation, valuation of distressed assets) or in cases where independent appraisal required by law
Based on Art. 8 of the Federal Law "On appraisal activity in the Russian Federation" dated July 29, 1998 No. 135-FZ, "the appraisal of the appraisal objects is mandatory if the appraisal objects are involved in the transaction, which are fully or partially Russian Federation, constituent entities of the Russian Federation or municipalities, including:
- when determining the value of objects of appraisal belonging to the Russian Federation, constituent entities of the Russian Federation or municipalities, for the purpose of their privatization, transfer to trust management or leasing;
- when using the objects of appraisal belonging to the Russian Federation, constituent entities of the Russian Federation or municipalities, as a subject of pledge;
- when selling or otherwise disposing of appraisal objects belonging to the Russian Federation, constituent entities of the Russian Federation or municipalities;
- in the event of the assignment of debt obligations related to the objects of appraisal belonging to the Russian Federation, constituent entities of the Russian Federation or municipal formations;
- when transferring objects of appraisal belonging to the Russian Federation, constituent entities of the Russian Federation or municipalities, as a contribution to authorized capital, funds of legal entities, as well as when a dispute arises about the value of the appraisal object, including:
- during the nationalization of property;
- for mortgage lending to individuals and legal entities in cases of disputes about the value of the subject of the mortgage;
- when drawing up marriage contracts and dividing the property of divorced spouses at the request of one of the parties or both parties in the event of a dispute about the value of this property;
- in the event of redemption or other seizure of property from owners for state or other stipulated by the legislation of the Russian Federation municipal needs;
- when assessing the objects of appraisal in order to control the correctness of the payment of taxes in the event of a dispute about the calculation of the taxable base ”.
In addition, according to Art. 70 FZ "On Mortgage" dated July 16, 1998 No. 102-FZ, when mortgaging the property complex of an enterprise, "an opinion of an independent auditor on the composition and value of property belonging to the enterprise" is required. In this case, it is also possible to attract an independent appraiser by the auditor to assess the property complex.
The approaches and methods for evaluating pledges used by pledges are based on the legislation of the Russian Federation in the field of appraisal activities. At the same time, the collateral, unlike the appraiser, is not obliged to evaluate the collateral strictly within the framework determined by the law. According to the Order of the Ministry of Economic Development of Russia "On approval of the federal assessment standard" General concepts appraisals, approaches to appraisal and requirements for appraisal (FSO No. 1) "" dated 20.07.2007 No. 256 when appraising property, three approaches are used: profitable, comparative, and costly.
Income approach - "a set of methods for appraising the value of the appraisal item, based on the determination of the expected income from the use of the appraisal item." The key term here is "expected", that is, assumed, predicted. The probabilistic component in assessing collateral should be minimized. Under typical economic conditions, the bank is not interested in extracting income from the collateral in the event of foreclosure, since it is not a core business for it. Therefore, the income approach is used by the mortgage service as an auxiliary one.
It is inappropriate to use the income approach when assessing simple types of security: vehicles, self-propelled vehicles, individual pieces of equipment, residential real estate. The pledge service uses a profitable approach when evaluating complex collaterals: property complexes, blocks of shares, participation interests, profitable real estate.
Practical case
A good illustration demonstrating the difference in the perception of the collateral and the approaches to its assessment by an independent appraiser and by the collateral is the case with the autodrome. As you guessed, the autodrome was offered as security for the requested loan. The fully automated driving platform faithfully simulated driving in real urban environments. The absence of competition allowed the mortgagor to receive super profits from the operation of the autodrome. The opinions of the pledgers and the appraiser about the value of the collateral turned out to be polar opposite.
An independent appraiser applied an income approach. His calculation was based on the income of the pledger from training the population in driving skills. Without going into the calculation technique, let us designate the level of the received value - 70 million rubles.
The pledge service began its assessment with the examination of legal documents. According to the certificate of ownership, the construction of an "autodrome" was offered as collateral. The technical passport of the BTI specified the composition of the property - an asphalt site. Ask yourself: "What exactly is offered as a pledge?" The cash flow used by the appraiser was generated by a legal entity that, in addition to the autodrome, had long-term contracts with city driving schools. However, the shares of participation in legal entity were not offered for bail. The autodrome is equipped with expensive equipment, but the collateral did not include it either. The average cost of unequipped racetracks based on a study of offers was RUB 5 million. The cost obtained by the market approach was additionally confirmed in the information on the costs of building the autodrome posted on the mortgagor's website.
In order to level the delta in value, the pledge service of the bank proposed to additionally work out the issue of pledging 100% of the participation shares and equipment of the autodrome.
Cost approach - "a set of methods for assessing the value of the appraised object, based on determining the costs necessary for reproduction or replacement of the appraisal object, taking into account depreciation and obsolescence." In theory, this is true, but in practice, calculations using UPVS (s) and KO-INVEST indices do not reflect the real market value of collateral objects.
Example
The owner of the warehouse terminal applies for a loan. Excellent warehouse terminal. The first group of capital. The design solution meets all modern requirements. Construction costs amounted to RUB 100 million. All estimates are available, the costs are documented. The results of the assessment using the cost-based approach confirm the estimated cost, from the rest of the approaches in the assessment report a justified refusal. The pledge service draws up a negative conclusion - the market value is determined to be close to zero. The focus is on the location of a warehouse terminal built without infrastructure at a distance of hundreds of kilometers from federal highways.
Of the entire apparatus of the methods of the cost approach, the collateralists use the method of net assets when evaluating blocks of shares and participation interests, while the balance sheet items are recalculated using the market approach.
Comparative approach - “a set of methods for appraising the value of the appraised item, based on a comparison of the appraisal item with objects - analogues of the appraisal item, for which there is information on prices.
An object - an analogue of the object of appraisal for the purpose of appraisal is an object similar to the object of appraisal in terms of the main economic, material, technical and other characteristics that determine its value ”. The comparative approach and the methods included in it are the main tools used by the collateral service in assessing collateral.
A brief summary of the principles of the pledge service with the report on the assessment of an independent appraiser in table. one
Tab. one. Technique for working with reports of independent appraisers
| Studied without fail | What are the limitations when using the assessment report |
|---|---|
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Components of the liquidity of the pledged item
Conversation between two creditors:
- Listen, it's impossible to work with these collateral. All their property is illiquid.
- No, they have liquid.
What you can tear off with your hands and sell it near the metro is liquidity.
The term "liquidity" in relation to the subject of pledge characterizes the possibility and speed of the sale of property in the event of foreclosure. The problem area in the conclusions of the collateralisers is the categorization of liquidity and the explanation of the reasons for the assigned category. Summarizing the practice of work, the following components of liquidity can be formulated:
- market capacity, "typical" of the transaction, implementation time;
- the presence of administrative barriers;
- functional features and limitations;
- social significance of security.
For ease of perception, I will give practical examples of the components of "liquidity".
Market capacity, "typical" transaction
The correspondence of the volume of the pledged property to the conditions of typical transactions on the market is investigated. The pledger is studying the readiness of the local market to "absorb" the amount of property offered as a pledge. The time resource required for the sale of the considered volume of property on market conditions is found out.
1. In the Tomsk branch of bank "T" vodka was offered as collateral. What could be more liquid than a bottle of vodka in Siberia? Nothing. The pledger thought the same when drawing up the pledge agreement. When the foreclosure was made, the amount of the pledge became clear. It was required to sell the commercial composition of vodka. The city could not drink such a volume of alcohol in six months, even if all residents of the city, including babies, began to drink alcohol. Regional excise stamp and the local trade brand was not allowed to sell alcohol in another region.
Summary. The liquidity of a bottle of vodka is not equal to the liquidity of the product mix with vodka limited by the regional excise tax and trade mark.
2. Bank "O" considered the pledge of the main production workshop of OJSC "Prom-Tractor". The enterprise is one of the four world leaders in the production of bulldozer equipment. The workshop area exceeded several tens of thousands of square meters. m. Calculating the market value of the shop, the regional collateral applied a comparative approach. A head office cost check revealed a six-fold overstatement. It turned out that the collateral was looking for analogs available on the market, that is, warehouse buildings with an area of \u200b\u200bseveral hundred square meters. The cost of the workshop was determined after consultation with the Ministry of Property of the Republic of Chuvashia.
Summary. An incorrect assessment of the conformity of the assessed object to standard lots on the market affected both the liquidity category and the value of the collateral object.
The presence of administrative barriers
The scenario for working with a source of information about a pledge provides for an analysis of the degree of government influence on the market for a pledged object (federal, regional, municipal level). The need for licenses, special permits, payment of excise taxes / duties and other payments is checked when implementing the proposed security. Liquidity limitation may be the need to register property with government agencies, certification.
1. A large retail chain applied for a loan product to a bank. The equipment of several hundred checkout points was proposed as collateral. The equipment is imported, new. Documents of the foundation of ownership, including confirming payment, are available. At first glance, it is a hassle-free pledge. The pledge examination revealed the peculiarity of the turnover of this type of property on the market. When making purchase and sale transactions with equipment, it was required to de-tax, fiscal, and tax registration. Taking into account the need for service in "specialized organizations", periodic breakdowns of ECZL units and thermal printers, the secondary market was practically absent. It's easier to buy a new machine.
Summary. Assessing collateral without analyzing liquidity can lead to incorrect value determination. If foreclosed, the bank would be forced to sell cash register equipment at dumping prices.
2. A classic example of administrative barriers is the property of the excise group: oil products, tobacco, alcohol-containing products.
Functional features and limitations
The property offered for collateral may be limited in turnover on the market due to explicit or implicit functional limitations.
The source of information is spoken to:
- features of the technical functioning of the pledged object, narrowing the scope of its use, and the segment of potential buyers;
- the need for service in specialized organizations;
- the level of complexity of dismantling / installation, transportation.
1. The bank was considering the possibility of lending to a coal company. Motorola radio stations were offered as collateral: individual radio systems for miners, dispatching and mobile radio stations. Great, new equipment. All documents confirming the ownership are available.
The examination revealed that the radio stations operated at three frequencies. Two of the functionally available frequency bands in the region were occupied by a rival enterprise and intelligence agencies. As a result, a narrow segment of the market of potential buyers due to a clear functional limitation.
2. When crediting the airport "Tolmachevo" in Novosibirsk, inspection equipment was offered as collateral. Interviewing market participants made it possible to establish that such used equipment will not be bought by large airports, since when supplied by the original manufacturer, all responsibility in case of an emergency will be on it, and when buying used equipment - on the airport security service. Therefore, the aviation security services informally block transactions with used inspection equipment. This is a hidden functional limitation that affects the liquidity of the collateral.
Socially significant property
The social significance of the pledged object, the possibility of foreclosure without reputational risks of the bank is considered.
1. The Tula city motorcade serving passenger traffic was credited. The park of city passenger buses has fallen to provide support. The vehicle is, in theory, a "transparent" deposit. The pledger has prepared a positive conclusion. At the stage of coordination with the head of the department, a gross error was revealed. Market operators were interviewed only from the perspective of a potential buyer. The forecast of the consequences in case of the need to sell the property has not been worked out. The detailing of the project established that the convoy dominated the local passenger transportation market and provided services to privileged categories of citizens: pensioners, schoolchildren, and students. In addition, the market practice excluded the sale of the assessed vehicle fleet for “real money”. All potential buyers of the declared number of buses considered only leasing schemes.
2. An illustration of a pledge of socially significant property can be:
- dormitory buildings, including for military personnel in reserve;
- city \u200b\u200bsewage treatment plants;
- infrastructure of power supply of settlements (power lines, equipment of power substations, heating plants);
- buildings of hospitals, kindergartens, schools;
- transport infrastructure of settlements: trolleybuses, trams, garbage trucks, city bus fleets;
- buildings of CHP, HPP, etc.
A short list of socially significant objects is given in clause 6 of Art. 129 FZ "On insolvency (bankruptcy)" No. 127-FZ dated 26.10.2002.
As a finalization of the section on the components of liquidity, I will give two rules for specialists working with collateral:
- The conclusion about the expediency of the pledge should be formulated based on the element-by-element analysis of all components of liquidity, and not on the basis of everyday perception of property.
- Start a project with the question: "How will I personally sell the property that I am considering now?"
In general, there are three categories of liquidity: average, satisfactory and poorly satisfactory. The term for the implementation of the pledge in the first two categories can be within 180 days, in the third category it exceeds 180 days.
Block EKZL - memory block with protected electronic control tape. It is intended for fixing sums of money in the memory of the cash register.
It will take you approximately 7 minutes to read this article.
Earlier we have already answered the question "How to get a loan secured?" - talked about the procedure for obtaining secured loans, considered the types of collateral and the stages of debt collection.
This article deals with the value of the collateral:
Interest rate
from 4.2% per month
Term
2, 3, 4 years
Amount
up to 1 million rubles.
The car remains with the owner
Interest rate
from 2.5% per month
Term
up to 1.5 years
Amount
up to 500 thousand rubles
It is possible to repay the loan ahead of schedule
Assessment of the value of the collateral
When involving professionals in the assessment of collateral, a financial institution usually plans to receive a full report, which will indicate the specific parameters of the collateral and justify the data on its value. The lender needs only the conclusions of an expert. If the assessed price does not match the parameters of the transaction, the financial institution will refuse funding. A potential borrower will have to look for other collateral, or reduce financial appetites by reducing the size of the loan and the duration of lending.
Stages of collateral assessment:
- Study of documents that categorically confirm the sole or joint ownership of the object used as security.
- Studying the collateral, including checking its current state.
- Calculation of the market value of the property.
- Drawing up a report on the work performed.
Additional requirements for appraisal activities are set depending on the type of collateral. The expert is obliged to carefully study the entire package of documents provided by the borrower, as well as the collateral itself. When it comes to real estate, electronics or vehicles, the technical condition of the property is assessed. Sometimes finished products and various types of raw materials are used as collateral, so the borrower needs to additionally obtain the right to use the premises in which such objects are stored. Thus, the appraisal of the pledged property also includes the verification of documents.
Lenders try to put forward the most adequate requirements for collateral, therefore, appraisers in their work often start from the requests of financial institutions. The assessment usually lasts from half an hour to several weeks, depending on the type of collateral. If any problems arise at the stage of performing such work, the borrower may refuse further cooperation with the lender.
Conclusion of a pledge agreement
After the assessment stage, the parties proceed to conclude a contract. According to such a document, the borrower transfers movable or immovable property to another party (the lender) in order to provide a guarantee of the return of the dog. The collateral process allows you to access improved lending conditions. A borrower who voluntarily guarantees the transaction can apply for long-term loans.
The contract specifies:
- The type of property pledged as collateral.
- The estimated value of the object used as collateral.
- Conditions for the use of collateral to repay debt obligations.
The thing used to guarantee the transaction remains the property of the borrower. The lender gains access to the collateral only in the event of a breach by the client of the agreement. The borrower is prohibited from selling or giving the pledged item until the end of the loan agreement.
The procedure for enforced debt collection occurs only in the event of a deliberate violation by the client of the terms of the transaction. First, the collateral is seized and then put up for auction by the lender. The amount received, which corresponds to the estimated value of the property or exceeds this indicator, is used to pay off the debt. The remainder of the proceeds from the sale of the property and the repayment of the loan is returned to the borrower.
