firm commitment

Show Summary Details

Quick Reference

1 An undertaking by a bank to lend up to a maximum sum over a period at a specified rate; a commitment fee usually has to be paid by the borrower, which is not returned if the loan is not taken up.

2 In the USA, an agreement in which an underwriter of a flotation assumes the risk that not all the securities issued will be sold, by guaranteeing to buy all the excess securities at the offer price.

3 A binding commitment to enter into an agreement.

Subjects: Financial Institutions and Services.

Reference entries

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.