What is a letter of credit sublimit in an ABL revolver?
A letter of credit sublimit in an ABL revolver is a ceiling on LC usage inside the revolving commitment, not extra capacity. SEC EX-10.3 lists Letter of Credit Sublimit means $100,000,000 and is part of, and not in addition to, Aggregate Commitments. An Alvarez & Marsal–hosted ABL agreement lists Letter of Credit Sublimit C$100,000,000 as part of Aggregate Revolving Commitments.
Last updated: September 17, 2026
LC sublimit is inside the revolver commitment
An LC sublimit is a ceiling on letter-of-credit usage within the revolving commitment. SEC EX-10.3 defines Letter of Credit Sublimit as $100,000,000 and states it is part of, and not in addition to, the Aggregate Commitments. The same exhibit states that the Outstanding Amount of all L/C Obligations shall not at any time exceed the Letter of Credit Sublimit.
An Alvarez & Marsal–hosted ABL and FILO Credit Agreement dated December 23, 2024 (akamai CDN) lists Letter of Credit Sublimit C$100,000,000 as part of, and not in addition to, Aggregate Revolving Commitments, and describes a revolving credit facility including a letter of credit sub-facility with an initial maximum of C$240,374,500.
Deal-specific dollar examples
A SEC 8-K lists a $50.0 million ABL revolver with a sublimit on letters of credit outstanding at any time of $10.0 million. An Alvarez & Marsal–hosted DIP supplemental record lists $200,000,000 revolving commitments including a $60,000,000 sublimit for the issuance of letters of credit. Culp’s SEC ABL disclosure lists a $35.0 million ABL Facility with an LC sub-facility not to exceed $1.0 million.
| Claim | Published substring | Source URL |
|---|---|---|
| LC Sublimit defined as part of Aggregate Commitments (not additive) | Letter of Credit Sublimit means an amount equal to $100,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments. | SEC EX-10.3 ABL Credit Agreement |
| L/C Obligations capped by Letter of Credit Sublimit | The Outstanding Amount of all L/C Obligations shall not at any time exceed the Letter of Credit Sublimit. | SEC EX-10.3 ABL Credit Agreement |
| AAM-hosted ABL/FILO: Letter of Credit Sublimit C$100,000,000 inside Aggregate Revolving Commitments | “Letter of Credit Sublimit” means (a) an aggregate amount for all Borrowers equal to C$100,000,000… The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments. | AAM-hosted ABL and FILO Credit Agreement (23 Dec 2024; akamai CDN) |
| AAM-hosted ABL/FILO: revolving facility includes letter of credit sub-facility | a revolving credit facility (including a letter of credit sub-facility) in an initial maximum amount not to exceed C$240,374,500 | AAM-hosted ABL and FILO Credit Agreement (23 Dec 2024) |
| SEC 8-K: $50M ABL revolver with $10M LC sublimit | $50.0 million asset-based, senior secured revolving credit facility (the “ABL revolver”) … with a sublimit on letters of credit outstanding at any time of $10.0 million | SEC 8-K (CIK 1641614) |
| AAM-hosted DIP order: $60M LC issuance sublimit inside $200M revolving commitments | $200,000,000 in revolving commitments … which shall include a $60,000,000 sublimit for the issuance of letters of credit | AAM-hosted Supplemental Application Record Tab M |
| AAM-hosted exit ABL: $40M U.S. LC sub-limit (deal-specific) | including a $40,000,000 sub-limit for letters of credit | AAM-hosted Application Record Volume 1 Part 2 |
| SEC Culp ABL: $35M facility; LC sub-facility ≤ $1.0M | The ABL Facility may be used for revolving credit loans and letters of credit … up to a maximum principal amount of $ 35.0 million. … sub-facility that allows the company to issue letters of credit in an aggregate amount not to exceed $ 1.0 million. | SEC Culp ABL Facility disclosure (R19) |
Sources: SEC EX-10.3; SEC 8-K (CIK 1641614); SEC Culp R19; Alvarez & Marsal–hosted ABL/FILO CA (akamai CDN), Tab M, and Application Record Vol. 1. OCC foreign-receivables LC-or-insurance language is not used as LC-sublimit proof — see foreign AR LC or credit insurance.
Frequently asked questions
What is a letter of credit sublimit in an ABL revolver?
A letter of credit sublimit is a capped portion of an ABL revolving commitment reserved for outstanding letters of credit. SEC EX-10.3 and an Alvarez & Marsal–hosted ABL/FILO credit agreement both state that the Letter of Credit Sublimit is part of, and not in addition to, Aggregate (Revolving) Commitments—so LC capacity is inside the line, not stacked on top.
Is an LC sublimit extra capacity on top of the revolver?
No. SEC EX-10.3 says: “The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.” The Alvarez & Marsal–hosted ABL/FILO agreement lists the same “part of, and not in addition to, the Aggregate Revolving Commitments” language for its C$100,000,000 Letter of Credit Sublimit.
What dollar LC sublimits do public ABL documents list?
SEC EX-10.3 lists Letter of Credit Sublimit $100,000,000. A SEC 8-K lists a $50.0 million ABL revolver with a $10.0 million letters-of-credit sublimit. An Alvarez & Marsal–hosted DIP order lists a $60,000,000 sublimit for issuance of letters of credit inside $200,000,000 revolving commitments. Culp’s SEC ABL disclosure lists a $35.0 million ABL Facility with an LC sub-facility not to exceed $1.0 million.
Related
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