Does foreign AR count toward the ABL borrowing base before revolver binds?
Before the revolver binds, foreign AR is commonly ineligible for the ABL borrowing base (OCC). Credit agreements may carve eligibility via letter of credit and/or credit insurance (OCC; CUI; ICU; Manitex). Some term sheets include Eligible Foreign AR in the Borrowing Base with a sublimit (TTM); others list foreign accounts as excluded (Rocky Brands). The credit agreement governs the carve.
Last updated: September 13, 2026
Buyer answer: foreign AR before the revolver binds
Before the revolver binds, foreign AR is commonly ineligible for the ABL borrowing base. The OCC Comptroller's Handbook on Asset-Based Lending lists foreign receivables among receivables commonly designated as ineligible because of legal, price, and country risks that can disrupt payment. The same OCC handbook states that a bank that permits foreign receivables to be eligible often requires a letter of credit or an insurance policy carrying minimal deductibles. Filed credit agreements then set the carve: CUI Global, ICU Eyewear / 1847 Holdings, and Manitex list LC and/or credit-insurance paths; TTM Technologies EX-10.3 includes Eligible Foreign AR inside the Borrowing Base with a sublimit; Rocky Brands lists foreign accounts as excluded. The credit agreement governs.
What OCC lists on foreign receivables
Under receivables commonly designated as ineligible, OCC says: "Foreign receivables with legal, price, and country risks that can disrupt payment." Immediately after, OCC says: "A bank that permits foreign receivables to be eligible often requires a letter of credit or an insurance policy carrying minimal deductibles." Separately, OCC states that common advance rates range from 70 percent to 85 percent of eligible accounts receivable—an eligible-AR range.
Credit-agreement carves: LC and credit insurance
CUI Global's loan agreement states that an account owed by a person located in a foreign country other than the United States or Canada is not Acceptable unless (A) supported by an irrevocable letter of credit acceptable to the Bank or (B) covered by foreign credit insurance acceptable to the Bank, and otherwise Acceptable. That agreement's Borrowing Base includes 80% of the balance due on Acceptable Receivables.
ICU Eyewear / 1847 Holdings states that an Account is not Eligible if the Account Debtor is not organized under U.S. law and is not a Canadian Account Debtor unless the sale is on letter of credit, Guaranty, or acceptance terms satisfactory to Lender, or the Account is insured by credit insurance satisfactory to Lender with Lender named as loss payee. Borrowing Base includes up to ninety percent (90%) of Eligible Accounts.
Manitex states that an Account Debtor that is a citizen or resident of any jurisdiction other than one of the United States or Canada is carved unless the Account is secured by a letter of credit issued by a bank acceptable to the Agent. Canadian Borrowing Base includes ninety percent (90%) of Eligible Insured Accounts plus eighty-five percent (85%) of Eligible Accounts.
Term-sheet split: Eligible Foreign in BB vs foreign accounts excluded
TTM Technologies EX-10.3 lists Borrowing Base as 85% of each Loan Party's eligible accounts receivable, including a sublimit for eligible foreign accounts receivable equal to the lesser of $30 million and 85% of eligible foreign accounts receivable (plus inventory). That is Eligible Foreign inside the Borrowing Base—with a hard sublimit.
By contrast, the Rocky Brands commitment letter (and its Cloudfront IR PDF twin) lists "(iii) foreign accounts" among eligibility exclusions. The same letter's Borrowing Base formula separately includes 90% of eligible US investment grade accounts receivable, 90% of eligible US credit insured accounts receivable, and 85% of Unenhanced Accounts. Rocky lists foreign accounts as ineligible on the same page.
| Claim | Listed | URL |
|---|---|---|
| A1 OCC: Foreign receivables commonly ineligible | Foreign receivables with legal, price, and country risks that can disrupt payment. | OCC Comptroller's Handbook: Asset-Based Lending |
| A2 OCC: LC or insurance path for foreign eligibility | A bank that permits foreign receivables to be eligible often requires a letter of credit or an insurance policy carrying minimal deductibles. | OCC Comptroller's Handbook: Asset-Based Lending |
| A3 OCC: common advance rates on eligible AR | Common advance rates range from 70 percent to 85 percent of eligible accounts receivable. | OCC Comptroller's Handbook: Asset-Based Lending |
| A4 TTM: Eligible Foreign inside Borrowing Base ($30M / 85% sublimit) | 85% of each Loan Party's eligible accounts receivable (including a sublimit for eligible foreign accounts receivable in an amount equal to the lesser of $30 million and 85% of eligible foreign accounts receivable) | TTM Technologies EX-10.3 (investors.ttm.com) |
| A5 Rocky Brands: foreign accounts on ineligibility list | (iii) foreign accounts | Rocky Brands Commitment Letter (Justia) |
| A7 Rocky Brands Cloudfront twin: same foreign-accounts exclusion | (iii) foreign accounts | Rocky Brands 8-K commitment letter PDF (Cloudfront IR) |
| A6 Rocky Brands: US credit-insured AR in BB (not foreign AR) | 90% of eligible US credit insured accounts receivable | Rocky Brands Commitment Letter (Justia) |
| A8 CUI Global: foreign-country Acceptable only via LC or foreign credit insurance | Any person or entity located in a foreign country other than the United States or Canada unless (A) the account is supported by an irrevocable letter of credit issued by a bank acceptable to the Bank … or (B) the account is covered by foreign credit insurance acceptable to the Bank and the account is otherwise an Acceptable Receivable. | CUI Global loan agreement (Justia) |
| A9 CUI Global: Borrowing Base = 80% Acceptable Receivables | 80% of the balance due on Acceptable Receivables | CUI Global loan agreement (Justia) |
| A10 ICU Eyewear / 1847 Holdings: non-US/non-Canadian Eligible via LC/Guaranty/acceptance or credit insurance loss-payee | is not a Canadian Account Debtor, unless … the sale is on letter of credit, Guaranty, or acceptance terms … or such Account is insured by credit insurance satisfactory to the Lender … with Lender named as loss payee. | ICU Eyewear / 1847 Holdings credit agreement (Justia) |
| A11 ICU Eyewear: Borrowing Base up to 90% Eligible Accounts | up to ninety percent (90%) of each Borrower's Eligible Accounts | ICU Eyewear / 1847 Holdings credit agreement (Justia) |
| A12 Manitex: outside US/Canada unless LC | a citizen or resident of any jurisdiction other than one of the United States or Canada, unless such Account is secured by a letter of credit issued by a bank acceptable to the Agent | Manitex International credit agreement (Justia) |
| A13 Manitex: Canadian Borrowing Base Eligible Insured / Eligible Accounts | ninety percent (90%) of Canadian Borrowing Base Obligors' Eligible Insured Accounts; plus (b) eighty-five percent (85%) of Canadian Borrowing Base Obligors' Eligible Accounts | Manitex International credit agreement (Justia) |
Sources (re-fetched 13 Sep 2026): OCC ABL handbook, TTM EX-10.3, Rocky Brands Justia, Rocky Cloudfront PDF, CUI Global, ICU / 1847 Holdings, Manitex.
Frequently asked questions
Does foreign AR count toward the ABL borrowing base before revolver binds?
Before the revolver binds, foreign AR is commonly ineligible for the ABL borrowing base (OCC). Credit agreements may carve eligibility via letter of credit and/or credit insurance (OCC; CUI; ICU; Manitex). Some term sheets include Eligible Foreign AR in the Borrowing Base with a sublimit (TTM); others list foreign accounts as excluded (Rocky Brands). The credit agreement governs the carve.
When does OCC say foreign receivables can become eligible?
The OCC Comptroller's Handbook on Asset-Based Lending lists "Foreign receivables with legal, price, and country risks that can disrupt payment" among receivables commonly designated as ineligible. It also says: "A bank that permits foreign receivables to be eligible often requires a letter of credit or an insurance policy carrying minimal deductibles."
How do filed credit agreements carve LC or credit-insurance support for foreign AR?
CUI Global says a foreign-country account is Acceptable only with an irrevocable letter of credit acceptable to the Bank or foreign credit insurance acceptable to the Bank (Borrowing Base includes 80% of Acceptable Receivables). ICU Eyewear / 1847 Holdings lists non-U.S./non-Canadian Account Debtors Eligible only on letter of credit, Guaranty, or acceptance terms, or credit insurance with Lender named as loss payee (Borrowing Base up to 90% of Eligible Accounts). Manitex lists Account Debtors outside the United States or Canada unless the Account is secured by a letter of credit acceptable to the Agent.
Do some term sheets include Eligible Foreign AR inside the Borrowing Base?
Yes. TTM Technologies' EX-10.3 lists Borrowing Base as 85% of each Loan Party's eligible accounts receivable, including a sublimit for eligible foreign accounts receivable equal to the lesser of $30 million and 85% of eligible foreign accounts receivable. That is a filed credit-agreement carve.
Does Rocky Brands exclude foreign accounts while still advancing on US credit-insured AR?
Yes. The Rocky Brands commitment letter (Justia; Cloudfront IR PDF twin) lists "(iii) foreign accounts" among eligibility exclusions, while the Borrowing Base formula separately includes 90% of eligible US credit insured accounts receivable (plus 90% investment-grade and 85% Unenhanced Accounts). US credit-insured AR is not the same as foreign AR.
Related
- Before binding an ABL revolver, which AR lines are ineligible and which get carved back at term sheet?
- What is a letter of credit sublimit in an ABL revolver?
- What is a concentration reserve or single-debtor cap in an ABL facility?
- Does government AR count toward the borrowing base before an ABL revolver binds?
- Does contra or affiliate AR count toward the borrowing base at term sheet?
- What is an ABL revolver unused-line fee and how does it relate to availability?