When lenders accelerate, the company will generally go bankrupt and restructure debts beyond Chapter 11. However, if the business cannot be saved because its core business is derailed, the issuer and lenders may agree to a Chapter 7 liquidation, which involves selling the company`s assets and transferring the proceeds to creditors. U.S. investors were sitting on a record pile of cash at the end of the first half of 2018, with assets under management of U.S. credit funds reaching a record $176 billion, according to LCD and Lipper. AUM growth began in mid-2016, when the Fed`s highly anticipated prospects for an interest rate hike finally came true. This has increased both institutional and retail investments in the asset class and triggered a phenomenal growth phase for the market. An administrative service fee is the annual loan management fee (including the distribution of interest to the syndication group, updating lender lists and managing loans). This lower volume has been in favour of borrowers – sustained demand for loans by investors has reduced spreads and the return on new loans on the market on average. However, this average decline in spreads is due to particularly strong demand for BB/BB credits, while prices have even increased slightly for lower quality credits. Investor concerns about macroeconomic conditions and the impact of political events on the global economy – particularly trade disputes between the United States and China – have led to a modest flight to credit quality at the expense of yield. This process has had a staggering result in the debt credit market, to the point that continuing to call it a «bank» credit market is an anachronism. The loan document often sets a minimum allocation amount of $5 million for a pro-rata commitment.
However, in the late 1990s, directors began to remove the most specific amounts for institutional tranches. In most cases, the minimum institutional endowment requirements have been reduced to $1 million to increase liquidity. There have also been a few cases where the cost of allocating institutional endowments has been reduced or even eliminated, but these lower allocation fees have remained rare until 2012 and the vast majority has been set at the traditional $3,500. Relative value Relative value may refer to the relative performance or deviation between (1) different instruments of the same issuer. B the credit spread is compared to that of a loan; (2) loans or bonds issued by issuers with a similar valuation and/or operating in the same sector, for example by comparing the credit spreads of a health care company rated «BB» with those of another health care company; and (3) spreads between markets.- B whose spread on the credit market is compared to the spread of high-rate bonds or companies. Relative value is a means of detecting undervalued or overvalued assets. The pricing of loans to institutional investors relates to the distribution of the loan in relation to credit quality and market-based factors. This second category can be subdivided into liquidity and market techniques (i.e. supply/demand).