Definition of Revolving Underwriting Facility (RUF)

medium-term Euronote facility, usually between three and seven years maturity, that guarantees the overseas sale of short-term promissory notes (the Euronotes) issued by the borrower at or below a predetermined interest rate. The revolving credit portion of an RUF is usually done through a single bank, known as the arranger. Typically, the arranger commits itself to a very small share of the total financing (less than 10%) and acts as placement agent for marketing the Euronotes. The Euronotes generally have maturities of one to six months, and are sold through a tender panel of commercial banks and investment banks. The revolving credit banks agree to purchase any unsold notes at a given Eurodollar spread over LIBOR. The borrower pays interest only on amounts actually drawn.