Prime Underwriting Facility

AAA

DEFINITION of 'Prime Underwriting Facility'

A kind of revolving underwriting facility. Prime underwriting facilities peg the lender's yield to the bank's prime rate. Most prime underwriting facilities are short-term notes of some sort.

INVESTOPEDIA EXPLAINS 'Prime Underwriting Facility'

The usual prime underwriting facility is a note with a maturity of anywhere from one to three years. In some cases, the lead bank will be unable to place the loan. When this happens, it will ask the underwriter of the facility to fund the balance of the credit.

RELATED TERMS
  1. Transferable Underwriting Facility ...

    A type of underwriting facility that deals in Euro notes. Transferable ...
  2. Lead Bank

    A bank that oversees the arrangement of a loan syndication. The ...
  3. Revolving Underwriting Facility ...

    A form of revolving credit in which a group of underwriters agrees ...
  4. Prime Rate

    The interest rate that commercial banks charge their most credit-worthy ...
  5. Underwriting

    1. The process by which investment bankers raise investment capital ...
  6. Lloyds Organizations

    An insurance syndicate that bases its organizational structure ...
Related Articles
  1. Insurance

    Municipal Bond Tips For The Series 7 Exam

    Learn to distinguish between general obligation and revenue bonds to ace this test.
  2. Insurance

    The Rise Of The Modern Investment Bank

    Get to know a little bit about the institutions whose actions help to guide free markets.
  3. Professionals

    Wanna Be A Bigwig? Try Investment Banking

    A career in this high-stress field can be very rewarding for the right person. Find out if you have what it takes.
  4. Bonds & Fixed Income

    Are High-Yield Bonds Too Risky?

    Despite their reputation, the debt securities known as "junk bonds" may actually reduce risk in your portfolio.
  5. Bonds & Fixed Income

    The Basics Of Municipal Bonds

    Investing in these bonds may offer a tax-free income stream but they are not without risks.
  6. Home & Auto

    The Bear On Bonds

    Bond investing is a stable and low-risk way to diversify a portfolio. However, knowing which types of bonds are right for you is not always easy.
  7. Investing Basics

    Understanding Private Placement

    Private placement refers to offering and selling shares in a company to a small group of sophisticated buyers.
  8. Entrepreneurship

    JPMorgan vs. Goldman Sachs: A Tale of Two Stocks

    The performance of JPMorgan and Goldman has been impressive, but one has a slight edge.
  9. Investing

    4 Hottest IPOs in 2015

    Where is smart money headed this year? These are the most anticipated IPOs of 2015.
  10. Professionals

    Is Now the Time for Junk Bonds?

    A bet on high-yield bonds is a bet that the global economy will continue to improve...but not too much.

You May Also Like

Hot Definitions
  1. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  2. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  3. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  4. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  5. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  6. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
Trading Center