Up-front fees for institutional tranches declined slightly to an average of 3.0 basis points per one million dollars committed for June 2001, while pro rata tranches also dipped from an average 3.9 basis points to 3.6 basis points between May 2001 and June 2001 for a rolling three-month period. According to Portfolio Management Data, fees on pro rata tranches for the three months ending June 2000 were an average 2.7 basis points while institutional fees were an average 2.2 basis points for the same period.
Marc Auerbach, associate at PMD, explained that the market is seeing a trending down of institutional fees as volume in the market declines. "The institutional market has not seen that much volume lately and there's more demand than supply," noted Auerbach, adding, "there's a smaller tick down for institutional fees but more of a story [than in the pro rata fee drop]". Auerbach attributed the drop off in pro rata to the continuing difficulties in getting pro rata tranches syndicated. "The story is still the same. There's just not much of a pro rata market," said Auerbach.
