Enter Recovery Inputs
Example Data Table
| Scenario | Exposure Base | Gross Recovery | Total Costs | PV Net Recovery | PV Recovery Rate |
|---|---|---|---|---|---|
| Secured loan workout | $520,000.00 | $361,000.00 | $23,500.00 | $327,028.59 | 62.89% |
| Guarantee-supported case | $410,000.00 | $298,000.00 | $18,000.00 | $272,611.42 | 66.49% |
| High-cost legal recovery | $600,000.00 | $340,000.00 | $52,000.00 | $265,447.86 | 44.24% |
Formula Used
Exposure Base = Outstanding Principal + Included Interest + Included Fees
Collateral Realized = Collateral Market Value × (1 − Haircut %)
Gross Recovery = Collateral Realized + Cash Settlement + Guarantee Recovery + Other Recoveries
Net Recovery = Gross Recovery − (Legal Cost + Collection Cost + Administrative Cost)
Present Value = Amount ÷ (1 + Annual Discount Rate)Months ÷ 12
Gross Recovery Rate = Gross Recovery ÷ Exposure Base × 100
Net Recovery Rate = Net Recovery ÷ Exposure Base × 100
PV Recovery Rate = PV Net Recovery ÷ Exposure Base × 100
Loss Given Default = 100 − PV Recovery Rate
How to Use This Calculator
- Enter the outstanding principal first.
- Add accrued interest and fees if your policy counts them.
- Enter collateral value and an expected haircut.
- Input each recovery stream and its expected timing in months.
- Add legal, collection, and administrative costs.
- Choose an annual discount rate for present-value recovery analysis.
- Click calculate to view rates, losses, stream values, and the chart.
- Use CSV or PDF export to save the calculated results.
Frequently Asked Questions
1. What does recovery rate measure?
Recovery rate measures how much exposure you expect to recover after default. It compares recovered proceeds against the selected exposure base, helping estimate credit loss severity and resolution quality.
2. Why use a collateral haircut?
A haircut reduces collateral value to reflect liquidation discounts, market stress, selling friction, and uncertainty. It gives a more conservative recovery estimate than using raw market value alone.
3. Why does timing matter in recovery analysis?
Delayed recoveries are worth less today. Discounting converts future collections into present value, which helps compare alternatives fairly and improves loss forecasting accuracy.
4. Should interest and fees be included?
That depends on your reporting policy. Some teams measure recovery against principal only, while others include accrued interest and fees. This calculator supports both approaches.
5. What is the difference between gross and net recovery?
Gross recovery includes all incoming proceeds before expenses. Net recovery subtracts legal, collection, and administrative costs, showing the amount actually retained after resolution efforts.
6. What does loss given default mean here?
Loss given default represents the portion of exposure not recovered after discounting. In this version, it is calculated as one hundred percent minus the present-value recovery rate.
7. Can this calculator support scenario testing?
Yes. Change haircuts, recovery timing, costs, or discount rates to compare best-case, base-case, and stressed outcomes. That makes it useful for portfolio reviews and credit policy discussions.
8. When is present-value recovery most useful?
Present-value recovery is most useful when workouts take months or years. It shows whether a slow, high headline recovery is actually weaker than a faster settlement.