Intrum - comment

After the call, the Intrum write-down explanation still makes no sense to us. The discount at which Carval have sold their stake in the Italian SPV amounts to 90% on the underlying assets from their 2018 valuation (which will have been high in the first place). We understand that this reflects the structural set-up of their equity stake and the fact that cashflows are subordinated to the pay-down of leverage inside the SPV. But either Carval have sold this asset far below value, or the math by which cashflows would start rolling in after another three years is off. Looking at the usual portfolio curve, we suspect it's the latter. So adjusting for the leverage effect this still poses material questions for the back-book valuation across the sector.