As most lenders’ know, Prosper had been planning to execute a debt sale during the month of April. To this end, a “bid file” was cut on April 11th. This bid file contained all loans that were more than 120 days past due as of that date that did not have a bankruptcy indicator or an open “Promise to Pay”.
In keeping with Prosper’s debt sale process, this file was sent to a list of approved bidders who have expressed interest in buying charged off Prosper debt. In addition, this file was placed with one of the largest debt auction/broker firms in the business. This firm has been in business for more than 15 years and hosts one of the premiere debt sale auction sites. The firm averages five portfolio sales a week – with portfolio sizes ranging from $2.5MM to $500MM.
As a result of these efforts, Prosper received a record number of bids on the sale file (eight). Unfortunately, all of the bids were extremely low. As I mentioned in my last update, the debt market was “flooded” by credit card issuers in March. That backlog has not dissipated.
At this point, we have not accepted a bid to buy the portfolio. We are actively soliciting alternative bids and proposals and are working through the alternatives. We are working to get the best price possible and appreciate your patience in this matter. Without compromising the status of negotiations, we will keep you informed on the process.