Arrangement Fee
Short definition
An arrangement fee is paid to the bank that structures the pack (arranger/agent). It can overlap with the upfront fee; in a syndicate an agency fee also runs annually.
Detailed explanation
Scope: documentation, syndication, security. A failed deal may carry a broken-deal fee. The agency fee is the operational charge over the life of the facility and adds a small take to EIR.
The CFO splits who is paid (MLA, bookrunner) from whether the price is risk premium or work fee.
Why it matters for the CFO
On a small ticket the arrangement fee can inflate all-in more than the margin.
How to read it
Cash at the door / tenor is a rough annual point; EIR carries cash timing more honestly. On a small ticket the percentage looks large.
Numerical example
300 mn TL syndicate, 0.75% arrangement = 2.25 mn TL at signing; rough take 0.15% per year over 5 years.
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Definitions are educational. They are not investment, credit or tax advice.