Commitment Fee

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Related to Commitment Fees: Upfront Fee, Management fee

Commitment Fee

A fee that a lender assesses on a borrower to keep a credit line open regardless of use. For example, a credit card company may charge a card holder $60 per year to allow him/her to continue to use the credit card. This should not be confused with interest, which is only calculated if a loan is made or a credit line is used.
References in periodicals archive ?
Once an initial draw has been made under a tranche, the drawn amounts accrue interest at 14 and 12 percent per annum under the $50M Tranche and the $150M Tranche, respectively, and the undrawn amount under the tranches accrues a commitment fee of 8 percent per annum.
First, it contended that the transaction did not involve granting put options to the mortgage originators that paid commitment fees to Freddie Mac.
Indeed, there has been relatively scant commentary on the methods for determining the arbitrators' fees and the types of fees that they may charge, such as cancellation or commitment fees.
The company's USD200m credit facility reduces the company's on-going annual commitment fees on the undrawn facility by USD2.
should adb not be able to raise tenge funding at or below the agreed ceiling rate by the end of the price discovery period (i) adb may offer us dollar or other substitute currency in accordance with adb s libor-based lending facility, or offer to provide the relevant amount in tenge at a higher rate; (ii) damu may request an extension of the price discovery period for a period of up to 1 year from the date of the loan agreement subject to the payment of any commitment fees, or (iii) damu may cancel any undisbursed loan with the concurrence of the rok and provided that any accrued commitment fees and any other costs have been paid.
The new facility amends and restates the prior revolving line of credit dated 26 June 2009 by extending its maturity through 4 January 2017 from 25 June 2013, cutting the borrowing rate and commitment fees and modifying some affirmative and negative covenants, the company said in a statement.
The loans were structured on 5- to 15-year terms at fixed rates with no commitment fees.
In addition, the company is decreasing the credit facility revolver commitment from USD600m to USD400m, which will save USD1m annually in commitment fees.
The new revolving facility, which pays an initial interest margin of 75 basis points over Euribor and commitment fees of 35%, will be used for refinancing another EUR1.