Assessments should, of course, reflect the reduction in credit quality that accompanies a credit cycle and ICHps should closely examine the quarterly and annual reports of their priority debt funds. Providers of priority and third-party debt should reflect the reduction in borrowers` credit quality as a reduction in nominal outstandings (which should then appear in the Fund`s profit and loss accounts as a non-liquidable charge relative to current income). Some priority debt securities that do not comply with a non-exercise policy may rely more on valuations to reflect values, particularly when they can mark their assets in the market. In this case, LPs should check whether the para discount is higher than the coupon rate of the loan (technically spread over the reference rate). This may be a sign that the investor is at risk, indicating that interest is not able to compensate for the capital loss, a fundamental principle of credit risk assessment. In the litigation, the applicants argued that the recapitalization transaction violated the « sacred rights » of non-exchangeable lenders, i.e. rights that cannot be cancelled or changed without the 100% agreement of the group of lenders. The sacred rights in question can be categorized into two categories: the proportional sharing provisions and the prohibition on the release of all lenders` guarantees. So what can individual lenders do to protect themselves? Certainly, for every transaction in which a lender is not the only « necessary lender, » or at least have a right to vote, if, to include « necessary lenders »2, the discussion at the level of the credit committee should focus on whether, in addition to the default restrictions on the proportional allocation of amendments, it should be required that the section of the amendment include a provision prohibiting any subordination of claims or pledges granted to lenders without the consent of any lender, or a super-majority (66 2/3 per cent) of lenders. In the case of larger syndicated transactions, the addition of a new « sacred » right and a 100 per cent threshold can be a difficult sale with principal arrangers and borrowers, and the less restrictive but protective standard for lenders by a very large majority could be all that a lender can achieve. In the case of smaller club transactions, where lenders are more likely to have an existing relationship, and in the case of a common focus on remedial measures, the 100% lender standard may be more accessible for bond subordination.