Loan Agreement Definitions

Mandatory costs: This formula, which covers the costs incurred by banks in complying with their regulatory obligations, is rarely negotiated. It is provided as a timeline for the installation agreement. However, the interest rate should only apply to LIBOR-based facilities and not to base interest rate facilities, as a bank`s base interest rate already contains a sum reflecting mandatory costs. Advances: A borrower must ensure that he has some flexibility to make advances (early repayment of credit) without additional costs being incurred if possible. However, advances are only allowed at the end of interest periods, which avoids the payment of termination fees and, in most cases, is in the best interest of the borrower. Particular attention should be paid to all mandatory instalments (e.g.B.