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FINANCIAL SERVICES SUCCESS STORY
Working with the trustee for a major retail chain in bankruptcy, OSI responded quickly in a crisis situation to service performing and non-performing accounts and transition a retail installment loan portfolio valued at $1 billion.
Situation
When a national retail chain with 900 stores filed for bankruptcy, the trustee for the store’s Asset-Backed Securities (ABS) needed a partner to service the chain’s performing and non-performing receivables accounts. The trustee had the responsibility to serve as successive servicer. However, the trustee was not fully equipped to actually service the company’s receivables.
Lacking adequate resources and experience, the trustee faced a crisis situation: the rating of the security was at risk. Moreover, the trustee was legally obligated to ensure a smooth transfer of the servicing from the bankrupt retail chain to a successor servicer. The trustee called on OSI to step in immediately and provide receivables services for all 900 stores.
Solution
As one of S&P’s few rated servicers, OSI provided substantial assistance in the collection of the receivables. First, they created a new service team specifically to handle the complex ABS servicing tasks. The team quickly mobilized, mastering the intricacies of the store’s back-office performing and non-performing receivables, and building the necessary infrastructure from the ground up.
OSI rapidly consolidated and cleansed the data in the company’s portfolio and assumed the management of centralized payments and related activities. They employed a full range of receivables services across the entire Credit-to-Cash Cycle:
- Created a billing statement with scan-able coding for electronic payment processing
- Created the detailed service report to bondholders required by the trustee
- Handled all customer service functions
- Managed first-party and third-party delinquency and recovery
- Managed the litigation network
Results
OSI acted quickly to design a highly customized, technically complex, national operation to deliver results in a crisis situation. Leveraging its breadth of experience, financial industry reputation, and comprehensive spectrum of receivables services, OSI acted as the master servicer to help:
- Transition a portfolio of millions of retail installment loans valued at $1 billion
- Handle performing and non-performing accounts
- Provide servicer reporting
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