Drop-dead fee

A term of British origin referring to fee that must be paid if a deal falls through because of financing issues.

Drop-Dead Fee

A fee that a borrowing company pays a lender if the borrower intends to use the funds from the loan to finance the acquisition of another company. The drop-dead fee is only paid if acquisition does not take place. That is, suppose Company A borrows from a bank to buy Company B. If Company B's shareholders refuse the offer and Company A has already borrowed the money, Company A must return what it has borrowed to the bank and pay the drop-dead fee to compensate the bank for lost interest. The term is most common in the United Kingdom.

单词	drop-dead fee
释义	drop-dead fee drop-dead fee n (Banking & Finance) a fee paid to an organization lending money to a company that is hoping to use it to finance a takeover bid. The fee is only paid if the bid fails and interest charges are only incurred if the money is needed Drop-dead fee Drop-dead fee A term of British origin referring to fee that must be paid if a deal falls through because of financing issues. Drop-Dead Fee A fee that a borrowing company pays a lender if the borrower intends to use the funds from the loan to finance the acquisition of another company. The drop-dead fee is only paid if acquisition does not take place. That is, suppose Company A borrows from a bank to buy Company B. If Company B's shareholders refuse the offer and Company A has already borrowed the money, Company A must return what it has borrowed to the bank and pay the drop-dead fee to compensate the bank for lost interest. The term is most common in the United Kingdom.
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