Interest Rate Hike Would Help PRAA, Other Debt Buyers

NORFOLK, VA ? Portfolio Recovery Associates Inc., which attempts to collect consumer debt that it buys from credit-card issuers and other lenders, is likely to benefit from the expected rise in interest rates, its chairman and chief executive officer said Wednesday.

Part of the pressure on interest rates has come from stronger-than-expected job growth, which is likely to generate greater personal income.

However, some households with adjustable-rate mortgages and other variable-rate debt will have difficulty making their payments as the cost of credit climbs, CEO Steven D. Fredrickson said following Portfolio Recovery?s annual shareholders? meeting.

The question, he said, will be, ?Who has exposure to rising interest rates??

With $30 million of cash on hand, Portfolio Recovery is prepared to step up its purchases of defaulted debt, Fredrickson told about 30 people attending the gathering at the company?s Norfolk headquarters and call center.

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