Finance Deals & Syndicated Lending · glossary
The fee the borrower pays on money committed but not drawn, because a promise to lend ties up a bank's capital. In Sunrise it is 35% of the margin, so an idle €5m revolver costs €35,000 a year. Clause 10.1 · Chapter 6
Explained in Chapter 6, Interest, Fees and the Cost of Money, of Finance Deals & Syndicated Lending.
The difference costs real money. A promise to lend ties up a bank's capital even while nothing is drawn. So Atlas pays a commitment fee on the part of each commitment it has not drawn. Under clause 10.1, the fee is 35% of the Margin, the banks' profit on top of their own cost of money.Read Chapter 1, What Debt Finance Is →
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