fronting fee

fronting fee
England, Wales
In the context of syndicated credit facilities, the fee payable by the borrower to the fronting bank for the credit risk the fronting bank takes on the syndicate lenders counter-indemnifying it pro-rata to their participation in the relevant facility should it have to pay out under a letter of credit, bond or guarantee issued by it. The fronting fee is usually 0.125% per annum of the amount outstanding under any issued letters of credit, bonds or guarantees.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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