Insiders: FTX bankruptcy claims are sold at 20% in the private OTC market

It is reported that a person familiar with the matter said that non-performing asset funds can purchase FTX bankruptcy claims at a maximum price of 20% in the private OTC market. After FTX, it now owes $3.1 billion to the 50 largest creditors. In some open bankruptcy markets, the transaction valuation of bad FTX assets is about 16% of the claim face value. The individual claims listed for sale on Xclaim, the platform that provides transaction encryption claims, are up to 27 million US dollars. An anonymous FTX creditor said that the pricing of the private OTC market was similar, and the purchase price of the non-performing asset fund was between 15% and 20% of the nominal value of the claim. “Their purchase is expected to receive funds within five years. If these funds finally receive 25% of the money within five years, this is not a good deal, because the annual recovery rate is only about 5%. I think many of these companies are expected to recover funds equivalent to 50% of the face value of the claim.”

Interpretation of this information:

The message reports on the possibility of non-performing asset funds purchasing FTX bankruptcy claims at a maximum price of 20% in the private OTC market. After FTX filed for bankruptcy, it now has a debt of $3.1 billion to its 50 largest creditors. While some open bankruptcy markets have valued FTX’s bad assets at around 16% of their claim face value, individual claims listed for sale on Xclaim, a platform that provides transaction encryption claims, have gone for as high as $27 million USD. An anonymous creditor claimed that the pricing in the private OTC market was similar, with non-performing asset funds likely paying between 15% and 20% of the nominal value of the claim.

The individual predicts that these funds will receive payment within five years, but the annual recovery rate is only estimated to be around 5%. The individual suggests that many of these companies will ultimately recover around 50% of the face value of the claim, which would make the purchase by the non-performing asset fund a wise choice.