hard · Corporate Credit Analysis
An analyst is evaluating the borrowing base for an Asset-Based Lending (ABL) facility. The borrower has $200 million in gross accounts receivable (AR) and $150 million in gross inventory. AR eligibility is 90% with an 85% advance rate. Inventory eligibility is 80% with a 75% Net Orderly Liquidation Value (NOLV) and a 65% advance rate on NOLV.
If there is a $10 million dilution reserve and a $5 million rent reserve, what is the total availability under a $250 million RCF commitment?
- 226.5 million
- 250.0 million
- 196.5 million
- 211.5 million
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