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.

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Comments (3)

Nov 29, 2020 - 12:02pm

full amount - lenders set aside 700mm, so they'll expect to get paid. LC facilities are separate  

Array

Nov 29, 2020 - 12:39pm

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