Up-front fees for pro rata tranches declined slightly to 4.7 basis points per one million dollars committed for April 2001 while institutional up-front fees remained steady at 3.1 basis points. According to Portfolio Management Data, fees on pro rata tranches for the three months ending April 2000 were 2.9 basis points and were 2.2 basis points for institutional pieces last year.
Marc Auerbach, associate at PMD, attributed the decline in pro rata fees from 5.2 basis points in March 2001 to 4.7 basis points in April to the completion of some of the largest deals to date back in January. "Some of the bigger deals were done in January so they fell out of the three-month mark," he explained. In addition, Auerbach noted that recent deal flow has comprised more strong, BB credits than in the three months prior, affecting fee sizes.
On the institutional front, Auerbach said the market may see a decline in up-front fees as some add-on telecom deals are still being counted in the three-month time frame. The present deal calendar has seen a dearth of telecom credits after many have struggled in the market this year and few are in the pipeline.
Average Retail Up-Front Fees For Each Million Dollars Committed (Excludes Refinancings)
Rolling Three Months Ended
Each month represents deals syndicated in that month and the previous two months.
