CCP has stated words to the effect that PDL prices are cheaper now than in the recent past. That is why I qualified the word "cheap" with the adjective "relatively".
In respect to Australia, the FY2015 Annual Report, stated:
“A moderation in price growth from late in the first half facilitated the successful renewal of expiring forward flow contracts along with additional volumes. PDL acquisitions were $87 million in the second half, compared with $56 million in the first half.
A solid pipeline of purchases has been secured for 2016.”
In the USA, the shortage of PDLs, and hence their elevated prices, forced CCP's USA subsidiary to tread water for years. The FY2014 Annual Report, for example, stated “Unfavourable purchasing conditions, however, are likely to remain over 2015.” However, H1FY16 presentation stated:, “Includes significant increase in US purchases.”, so I assume that PDL prices in the USA are cheaper than before – that is, relatively cheap.
On your thoughts, I have not given the supply side of PDLs much consideration. There are always folk who do not pay their debts unless somebody overtly asks them, perhaps a number of times. In the USA, the cause of the shortage of debt was that the behaviour of professional debt collecting firms received more regulatory scrutiny after the GFC, and some collectors like Encore Capital were successfully prosecuted and fined. This was more a matter of applying established law than enacting new laws. I imagine that CCP hopes its gentler approach may in time win over some of the large creditors (banks, utilities and the like) who have the better quality paper, and who prefer a gentler collections style. Time will tell. If the USA business performs well, that would be a bonus.
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