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The largest publicly held debt buyers reported mixed financial results in early 2009 and several spoke of a period marked by controlled purchases that will help them pounce on falling prices later this year. All of the buyers purchase large volumes of delinquent credit card loans. At Asset Acceptance Capital Corp., Mark Redman, senior vice president and chief financial officer, recently said the Warren, Mich.-based debt buyer "carefully controlled our levels of purchasing [in the first half of the year] … to free up capital to purchase at what we expect will be more advantageous pricing in the second half of 2009 and early 2010." The company spent $22.1 million in the first quarter ended March 31 to buy charged-off consumer-debt portfolios with a face value of $747.8 million, for a blended rate of 2.95% of face value. During the same period last year, the company spent $22 million to buy debt with a face value of $542.8 million, for a blended rate of 4.06%. At Englewood Cliffs, N.J.-based Asta Funding Inc. Chairman and CEO Gary Stern recently told analysts his company is seeing "some attractive [purchasing] opportunities and has begun ... acquiring portfolios with a face value of approximately $64.2 million at a cost of $3.7 million in the month of April." At Encore Capital Group, a San Diego-based debt buyer, President and CEO Brandon Black says "the supply of charged-off credit card debt has reached a historically high level, the number of well-capitalized consumer debt buyers is shrinking and portfolio prices are trending down." Encore Capital invested $55.9 million during the quarter to purchase a face value of $1.3 billion in debt, compared with a $47.9 million investment in debt with a face value of $1.2 billion last year. Portfolio Recovery Associates Inc., a Norfolk, Va.-based debt purchaser, paid $52 million to acquire 87 portfolios from 19 different sellers during the first quarter. The face value of the purchased accounts totaled $961 million.

 

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