Mr. Maurice Crowley:

When a bank goes to sell the loan, to get the deleveraging benefits, etc, it needs to strengthen its balance sheets, there needs to be a clear cutting of the ties. If the bank still has skin in the game or has some risk exposure to those loans, then it does not get that deleveraging effect or capital benefit.

On one level we cannot be confident there will not be an increase in the rates of the loans in question. The individual bank selling the loan portfolio is in a position to regulate the interest rate that will be charged by the purchaser, although evidence to date would suggest none of the purchasers have sought to increase interest rates. Their focus has been on curing or improving the status of the debt they have. They bought it at a deep discount and have gone about improving its status and performance through restructuring, etc. My sense of it is that their interests are in curing the debt so they can sell the portfolio on at a profit. It would not be to their benefit to raise the loans’ interest rates to cover losses in the portfolio.