4.9.6 Specifying Commitment Fee
If a borrower has availed money from the participant by means of swing line, you can process commitment fee on unutilized tranche amount based on the include swing and exclude swing options.
- Include swing
Select this option to indicate that during calculation of commitment fee swing line drawdown should be considered.
- Exclude swing
Select this option to indicate that during calculation of commitment fee swing line drawdown should not be considered.
Note:
You can set the commitment fee including swing line drawdown option while booking the new tranche contract and you cannot change it during the contract amendments. - Internal GL
Select the internal GL to be used for swing line drawdowns from the list of accounts.
For more details on swing line refer Loan Syndication – An Overview chapter under Loan Syndication.
Example
Participant | Asset sharing ratio % | Available Limits (USD mio) |
---|---|---|
CITIBANK | 30 | 15 |
BARCLAYS | 50 | 25 |
NATWEST | 20 | 10 |
Participant | Asset sharing ratio in % | Share in DD | Tranche Available amount (USD) |
---|---|---|---|
CITIBANK | 0.00 | Nil | 15 |
BARCLAYS | 66.67 | 20 | 5 |
NATWEST | 33.33 | 10 | Nil |
Participant | Asset sharing ratio in % | Share in DD | Tranche Available Limits (USD) |
---|---|---|---|
CITIBANK | 30 | 9 | 15 |
BARCLAYS | 50 | 15 | 5 |
NATWEST | 20 | 6 | Nil |
If the commitment fee rate to be applied is 0.25%, then on 03-Jan-2006,
Participant | Asset sharing ratio in% | Fee amount |
---|---|---|
CITIBANK | 30 | 205.479 |
BARCLAYS | 50 | 342.465 |
NATWEST | 20 | 136.986 |
Commitment fee = 20,000,000 * 0.25/100*2/365 =273.9726
Participant | Tranche available Amount (USD) | Availability Ratio in % | Fee amount |
---|---|---|---|
CITIBANK | 15 | 75 | 205.47945 |
BARCLAYS | 5 | 25 | 68.49315 |
NATWEST | 0 | 0 | 0 |
Parent topic: Processing a Borrower Tranche Contract