Project Type: 15,000 Mixed Asset NPL/PL Portfolio
Assignment: Environmental Risk Ranking and Cost Estimation
AEI EU provided Environmental Due Diligence consultancy services to a Fortune 50 Bank for assessment of a 15,000 mixed asset NPL / PL Portfolio, across 4 countries in Q2 2016. The screening tool was tailored for the portfolio and incorporated client specific sensitivities across the typical range of environmental issues. The system was scalable and limited to the available electronic information provided by the vendors property advisors.
The basic screen – based on asset construction date and renovation dates, provided:
- Screening against deleterious materials (ACM, PCB, LBP, ODS), based on country specific dates of abandonment of use, for each of the 4 EU member countries;
- Risk ranking of assets, into High, High Medium, Medium and Low risk categories, based on cumulative risk factors, asset type and ranking logic; and,
- Cost estimation, using three scenarios for each asset for High, Reasonable and Low cost estimates.
In addition to the basic screen, by integrating an ArcGIS mapping system, AEI provided the following additional services in order to develop a more complex and integrated environmental iChart for the portfolio:
- Whether the property was included in a medium or high risk seismic zone;
- Whether the property was in an 1:20, 1:50 or 1:100 area prone to flooding;
- The potential for elevated radon at the property;
- Cost estimation, using three scenarios for each asset for High, Reasonable and Low cost estimates, for each of the Seismic, Flood and Radon categories; and,
- Integration of the Seismic, Flood and Radon categories into the iChart risk ranking and costing spread sheet.
The final report included a detailed cover letter / report that fully explained the risk ranking logic, asset categorisation and priority assets for carve out or additional research, asset mapping by asset class, seismic, flood and radon contour maps, and bid package friendly graphics.