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committed facility

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An agreement between a bank and a customer to provide funds up to a specified maximum at a specified interest rate (in the UK this is usually based upon an agreed margin over the London Inter Bank Offered Rate) for a certain period. The total cost will be the interest rate plus the mandatory liquid asset cost. The agreement will include the conditions that must be adhered to by the borrower for the facility to remain in place. Compare uncommitted facility. See also revolving bank facility.

Subjects: Social sciencesEconomics

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