Committed

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Revision as of 08:30, 9 October 2013 by imported>Doug Williamson (Category added 9/10/13 and spacing)
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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.


See also