OFII Guarantee Fees Survey Results

1
OFII Guarantee Fees SurveyResults Findings

• The survey was conducted across our entire
  membership and we received thirty three
  responses. Any references to company names or
  practices that may have been included in the
  responses have been removed to ensure
  confidentiality.
• E-mail sweber_at_ofii.org if you have any questions
  or comments.

2
Question 1 Please indicate by Yes or No if
you pay the following types of guarantee fees to
foreign affiliates a) Debt     b)
Performance     c) Other

• Two-thirds of respondents paid one or multiple
  forms of guarantee fees to foreign affiliates.
• 64 percent, 21 of 33, said they paid one or
  multiple guarantee fees.
• Nearly all of those paying fees, paid only with
  respect to debt
• 90 percent, 19 of 21, paid only Debt.
• 2 paid Performance fees in addition to Debt fees
• 2 also were provided guarantees on real estate
  Leases but only 1 paid a fee for this guarantee
• Large majority held debt and paid fees on that
  debt.
• 70 percent of those with debt, 21 of 30, paid
  guarantee fees on that debt.

3
Question 2 For those that responded yes in
Question 1, please indicate A) how the amount of
the fee is determined and B) whether it is part
of your transfer pricing analysis and
documentation?

• Responses to Question 2A varied significantly and
  did not lend themselves to interpretation. To
  receive a sample of written responses, redacted
  to ensure confidentiality, please e-mail
  sweber_at_ofii.org.
• Less than a third of respondents reported using
  third party consultation and analysis in fee
  determination.
• 23 percent, 5 of 22, reported third party input
  in fee determination
• Less than a third reported that their Global
  Parent set the amount of fees.
• 23 percent, 5 of 22, said the Global Parent
• Almost one-third reported including fees in their
  transfer pricing analysis and documentation.
• 32 percent, 7 of 22, included fees

4
Question 3 If you answered yes to question 1,
what rate did you charge for your guarantee fee?

• The average rate (mean) charged for a guarantee
  fee was 24 basis points.
• A majority of companies paid fees of less than 15
  basis points to their foreign affiliate.
• 13 companies, 60 percent of those paying fees,
  pay between 0 and 15 bps.
• The range of fees paid was from 5 100 bps.
• 13 paid between 5 15 bps (60 percent)
• 4 paid pay between 15 30 bps (18 percent)
• 2 paid between 30 50 bps (9 percent)
• 3 paid between 45 60 bps (14 percent)