Film Accounting Glossary
Bond fee
What is a bond fee?
Also called completion bond fee, or guarantor fee.
A bond fee is what a production pays a completion guarantor to guarantee delivery of the finished picture, customarily quoted as a percentage of the budget with a portion rebated if the bond is never called.
Rates commonly run in the low single digits of the strike price, and the fee itself is a budget line above the contingency. In exchange the guarantor gets audit rights, approval over budget changes, and step-in rights if the picture goes off the rails.
Example
On a $10M strike price at 2%, the bond fee is $200,000, with a no-claims rebate often returning a meaningful share if the bond is never called. It is paid at closing and budgeted above the contingency line.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
A named line in the general expenses section, paid to the completion guarantor as a condition of the production loan.
Common mistake
Leaving the fee out of the budget, or budgeting the gross fee and forgetting that a no-claims rebate commonly returns part of it if the bond is never called.
Related questions
- How much does a completion bond cost?
- Customarily quoted as a percentage of the strike price, in the low single digits, with part of it rebated if the bond is never called on.
- Is the bond fee refundable?
- Partly. Most guarantors rebate a share of the fee where no claim is made, but the rebate is negotiated up front rather than assumed.