Committed: Difference between revisions
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imported>Doug Williamson (Link with Standby credit facility page.) |
imported>Doug Williamson (Add headings.) |
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1. | 1. ''Borrowing and lending factilities.'' | ||
A committed borrowing facility is one in which the potential lender - for example a bank - is legally obliged to provide the funds when required to do so by the borrower (subject to the borrower complying with the terms of the related facility agreement). | A committed borrowing facility is one in which the potential lender - for example a bank - is legally obliged to provide the funds when required to do so by the borrower (subject to the borrower complying with the terms of the related facility agreement). | ||
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2. | 2. ''Risk management - risk identification.'' | ||
A committed risk is one relating to a contractual or commercial commitment. | A committed risk is one relating to a contractual or commercial commitment. | ||
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== See also == | == See also == | ||
* [[An introduction to loan finance]] | |||
* [[Commitment fee]] | * [[Commitment fee]] | ||
* [[Committed risk]] | * [[Committed risk]] | ||
* [[Secured]] | |||
* [[Standby credit facility]] | * [[Standby credit facility]] | ||
* [[Uncommitted]] | * [[Uncommitted]] | ||
* [[ | * [[Unsecured]] | ||
[[Category:Long_term_funding]] | [[Category:Long_term_funding]] | ||
Latest revision as of 10:10, 2 June 2021
1. Borrowing and lending factilities.
A committed borrowing facility is one in which the potential lender - for example a bank - is legally obliged to provide the funds when required to do so by the borrower (subject to the borrower complying with the terms of the related facility agreement).
A commitment fee will normally be charged to the borrower on any undrawn part of the facility.
An alternative basis of charging commitment fees is on the basis of the whole of the facility (whether or not it is drawn down). This is of course a more favourable basis for the lender.
2. Risk management - risk identification.
A committed risk is one relating to a contractual or commercial commitment.
