Recovery Rate & Forced Sale Value

Recovery Rate and Forced Sales

Bank sale and forced auction sales often occur as a result of challenging market conditions when creditors take control of the asset and sell it quickly with the aim to recover as much of their original investment as possible. By analysing sales undertaken on this basis, VesselsValue Recovery Rates estimate the discounted sale price the asset achieved under bank driven or auction sale conditions.

How is the Recovery Rate calculated?

The Recovery Rate is the sale price achieved as a proportion of the VV value on the day of sale. The Recovery Rate is expressed as a percentage or decimal. It is specifically designed to quantify the effect an auction sale has on the final sale price of the vessel in comparison to the Market Value.

The Recovery Rate for an individual vessel is calculated by comparing the final sale price achieved against the Market Value for the day of sale of that same vessel. The sector recovery rate is calculated using the average of the Recovery Rates achieved in that sector across a period.

Recovery Rate Data

VesselsValue collect and store all transactional data associated with assets sold either via bank or auction sale. This data is provided in the Recovery Rates page.

Forced Sale Valuation

By applying the Recovery Rate to the VV Market Value we can produce a bespoke Forced Sale Valuation, giving an indication of the likely price achievable under a forced sale situation.