Committed: Difference between revisions
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1. | |||
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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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. | 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. | |||
A committed risk is one relating to a contractual or commercial commitment. | |||
== See also == | == See also == | ||
* [[Commitment fee]] | * [[Commitment fee]] | ||
* [[Committed risk]] | |||
* [[Uncommitted]] | * [[Uncommitted]] | ||
* [[An introduction to loan finance]] | * [[An introduction to loan finance]] | ||
[[Category:Long_term_funding]] | [[Category:Long_term_funding]] | ||
Revision as of 06:17, 19 July 2016
1.
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.
A committed risk is one relating to a contractual or commercial commitment.
