Commitment Letter
(Fully Underwritten Commitment)

Summary

This template is a commitment letter evidencing a bank's commitment to provide the full amount of a loan to a borrower. This is a fully underwritten commitment and not a partially underwritten commitment or a best efforts commitment. This template includes practical guidance, drafting notes, and alternate and optional clauses. This commitment letter is commonly used in syndicated leveraged loans and assumes the following: • This is a senior secured credit facility consisting of one or more term loans and a revolving loan. • There is one lead arranger and an administrative agent acting for multiple lenders (although alternative clauses have been included to provide for multiple arrangers). • This commitment letter contemplates an acquisition financing involving a private equity sponsor. It should be modified to your specific transaction and to reflect the business agreement of the parties. The parties, type of financing, and other factors relevant to your transaction will require modifications to this template. While the standard practice is to start with the bank's form, this template contains standard language found in commitment letters with alternate and optional clauses. For a full listing of key content covering finance fundamentals, see Finance Fundamentals Resource Kit. For a full listing of related private equity and financial reporting content, see Private Equity Transactions Resource Kit and Financial Statements and Reporting Resource Kit. For more information on fully underwritten commitments, see Mechanics of Loan Syndication. See Commitment Letter and Term Sheet Provisions for a discussion of best efforts engagement letters. For a searchable database from Practical Guidance of publicly filed credit agreements and commitment letters that enables users to search, compare, and analyze credit agreements using approximately 90 detailed deal points and commitment letters using approximately 70 deal points to filter search results, see Market Standards here. For current trends in commitment letters from Market Standards, see Market Trends 2023/24: Commitment Letter Provisions, Market Trends 2023/24: Commitment Letter Term Sheet Provisions, and Market Trends 2023/24: Commitment Letters for Acquisition Financing. For deeper treatise insights, see 4A Real Estate Financing § 2J.02, 1 The Law of Letters of Credit § 2.09, and 1 Senior Loan Officers Desk Reference § 1B.01.