Revolver commitment fee calculation?
A company I am building a model for has a .5% annual commitment fee on the unused portion of a $700mm revolving credit facility. The maximum letter of credit capacity is $50mm. Assuming the company has an outstanding balance of 0 on the revolver, would the quarterly commitment fee be = to (.005*(700-50))/4 due to the $50mm LOC capacity, or would it just be (.005*(700))/4? Thanks.
I would do it using the full 700. Yes LCs decrease your capacity technically but the company should be paying for the entire undrawn portion even though their capacity may not be the entire 700
full amount - lenders set aside 700mm, so they’ll expect to get paid. LC facilities are separate
Quisquam ipsa dolorem possimus ut incidunt sit dolores provident. Vel at laboriosam distinctio doloribus. Unde accusamus sit sint quam. Doloremque eos aut sed fugiat recusandae sed laboriosam.
Culpa alias autem aut rem tempora consequatur. Facilis et debitis omnis aut. Ullam eius atque nam ea. Odio voluptates voluptate ut sunt impedit excepturi quod. Ducimus beatae quis perferendis autem nisi tempore. Quibusdam qui nesciunt facere adipisci quae.
Quia voluptatem et cupiditate nulla doloribus maxime. Dolorum voluptas sit quos et.
Omnis nihil dicta placeat enim nemo illo sunt. Aliquid ut unde porro dolorem. Sint dolorem alias est libero autem esse non suscipit. Voluptatem eveniet quia cumque et et cum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...