7.4.4 Expense Fee

Expense type of fees refer to the fees which are incurred by the bank during of the credit agreement and are not directly charged to the borrower. These expenses may be of the following types.

Expenses incurred by agent on a facility or tranche which are to be shared with other participants. Such expense may be event driven or ad hoc.

Expense incurred on a facility or tranche by the Bank, irrespective of whether it is an agent or a participant. For example, Fees paid to Credit Guarantor, Legal fees, and so on. These types of expenses are periodic, paid in advance, or in arrears.

1. The expenses may be paid in advance or arrears.
2. The expenses could be one-time payment or periodic payment.
3. A new basis amount Principal is introduced for the following:
   • Facility amount
   • Tranche amount
   • Drawdown amount.
4. This type of expense is applicable to Tranche and Drawdown contracts.
5. Expenses fee are allowed to be received from participants in a ratio same as the asset ratio or a user defined ratio.
6. A new amount tag is introduced for parking GL – PGL for configuring accounting entries.
7. The expense fees can be configured to be straight-through-processed to the loans side for tranche and drawdown.