Trust not speed is the real constraint in illiquid-loan and NPL pricing: cautious bidding loses good deals and misdirected assumptions produce the occasional large miss. The valuation process combines seller provided data with a reference data set that fills the historical data gaps and reflects the different workout strategies of the investor.

This article sets out how to earn a senior credit officer’s trust in an agent-supported valuation by building an independent verification agent. The agent produces a challenger, not a second valuation that runs on rails: the agent orchestrates and explains, while every figure comes from deterministic, reproducible engines. Crucially, it uses the reference portfolio to backtest the valuation process. We detail the five conditions that build trust and describe an eleven-stage verification workflow and its deterministic tool stack. We explain the exact split of decision rights between agent and human and show how the same control architecture extends to models for PD, LGD, prepayment and IFRS 9 ECL.

Read the full article here: Creating Trust in Agentic Valuation of Non-Performing Loans