bad.loansworkflow
A full walk-through of how a distressed-loan portfolio moves through the platform - from the moment a seller institution onboards, through standardization, NDA-gated diligence, structured price discovery, and binding settlement, to post-trade reporting on both sides.
Phase 1
Onboarding & Vetting
Institution registers as Seller
The originating bank, finance company, or development institution applies for a Seller account. The platform requests the institution's SAMA / regulator licence reference, a primary contact, and evidence of authority to dispose of distressed assets. Manual review by the bad.loans team typically completes within 1-2 business days.
Institution registers as Buyer
Distressed-credit funds, PE firms, sovereign desks, family offices, and asset managers apply with mandate documentation, fund size, ticket-size preferences, asset-class focus, and KYC/AML evidence. The platform's vetting layer screens against UK, EU, OFAC, and UN sanctions plus PEP and adverse-media checks before approval.
Phase 2
Portfolio Listing & Standardization
Loan tape upload
The seller drops in a CSV (or uses an accounting-system integration). The platform validates each row against the asset-class template - mortgage, SME, corporate, retail - flagging missing fields, format mismatches, or implausible values before the listing can proceed.
Asset-class normalisation
The platform normalises balances to the listing currency, aligns delinquency buckets, classifies Sharia structures (Murabaha / Ijara / Musharaka / Mudaraba / Sukuk), and tags collateral by category. The seller reviews the normalised view before publishing.
Data-room provisioning
The system auto-provisions a structured data room with required-document slots: facility agreement, security documents, REGA / Land Department title, valuation, payment history, sponsor financials, tenancy schedule, insurance, EPC, and Sharia attestation. Each upload feeds the readiness score.
Pricing intelligence
A 12-model pricing engine runs over the loan tape - DCF, Monte Carlo, IFRS 9 ECL, recovery curves, collateral-floor model, sensitivity matrix - producing an indicative bid range the seller can use to set reserve and starting-bid levels.
Phase 3
Discovery & NDA Gating
Marketplace browse
Approved buyers see only the teaser-level summary on the marketplace: asset type, ticket size, geography, currency, vintage, and the indicative price range. No loan-level data, no counterparty identification, no document downloads - until an NDA is signed.
NDA execution
The buyer reviews a Sharia-aware, SAMA-aligned NDA tailored to the portfolio. Electronic execution is logged to an immutable audit trail with timestamp, IP, and signatory identity. The signed NDA returns to the seller's inbox automatically.
Data-room access (zero-download)
The buyer gains controlled access to the data room. Documents are server-rendered as image tiles with the buyer's email, IP, and timestamp burned in as a watermark - no source files, no downloads, no copy-paste. Every page view is logged.
Encrypted Q&A
Buyers post structured questions; sellers (or their advisors) respond. AES-256-GCM encryption, threaded by document or topic, and visible to the seller's full advisory team - never to competing buyers.
Phase 4
Three-Phase Auction
Round 1 - Indicative bids
Buyers submit non-binding indicative bids reflecting their initial price view. The seller reviews aggregate Round 1 demand, sees engagement analytics on each bidder (active time, document coverage, page depth, recency), and selects a shortlist.
Shortlist & deeper diligence
The seller advances the top bidders into Round 2 - either manually or by automatic top-N selection. Shortlisted buyers receive expanded data-room access, can request bespoke loan-level samples, and engage in scoped seller calls.
Round 3 - Binding bids
Shortlisted buyers submit binding bids against the seller's reserve. Sealed-bid integrity holds until close - bidders see only their own bid until the round ends. The auction supports sealed, open, Dutch, and hybrid mechanics.
Award decision
Highest binding bid above reserve wins. The seller can also reject all bids if reserve is not met, or negotiate with one or more bidders in a structured side-track logged to the audit trail.
Phase 5
Settlement & Post-Trade
Sale & Purchase Agreement
The platform generates the SPA from the auction outcome - winning bid, perimeter, representations, conditions precedent. Counsel for both sides reviews and the document is e-executed on platform with the same immutable audit trail.
Settlement via licensed institutions
Funds settle through SAMA-licensed banking institutions per the platform's regulatory framing. The seller transfers the loan-level data, security documents, and any operational handover materials to the buyer or buyer-appointed servicer.
Loan-tape transfer & servicing handover
The buyer receives the validated, normalised loan tape plus the complete data room as a permanent record. Where the buyer engages a third-party servicer, the platform supports a structured handover workflow with role-scoped access.
Post-trade reporting
The seller closes out with a structured post-trade report - settlement timestamp, full bid history, engagement analytics across the bidder pool, and an audit-trail export suitable for SAMA compliance review or internal audit.
Ready to participate?
Whether you're looking to dispose of distressed exposures or build a new NPL book, start by creating an institutional account. Approval is manual and typically completes within 1-2 business days.