What happen if a loan goes into default?
If an underlying loan goes into default, usually the underlying lender (or alternately the servicer or backup servicer in certain circumstances) is primarily responsible for servicing the loan to recover outstanding. Recoveries are generally assets of the Fund. Depending on the nature of the exposure and the arrangements with the underlying lender there may be forms of structural protection which may be available to buffer the Fund against loss e.g. overcollateralization, first loss pieces and loss reserves, however there is no guarantee that these will be sufficient to protect against loss. Valuations of that particular asset may be adjusted if deemed necessary in accordance with Manning Asset Management’s valuation methodology.