Revolving Letter of Credit Law and Legal Definition
Revolving letter of credit refers to a letter of credit that self-renews by providing for continuing line of credit. Continuing line of credit is drawn periodically by beneficiary and the customer periodically repays. A revolving letter of credit is used when there will be multiple drafts.
A revolving letter of credit is a way of solving one kind of a problem. The problem is arises when there are series of transactions that beneficiary want to be paid by means of a letter of credit. A revolving letter of credit either revolves around the idea of the amount of the letter of credit, or it revolves around a period of time.[Trans Global Alloy, Ltd. v. First Nat'l Bank, 564 So. 2d 697 (La.App. 5 Cir. 1990)].