For Letter of Credit we have terms and definitions in 10 topics. The topics are Accounting, Accounting Terms, Bonds, Business, Commercial Real Estate, International Economics, Ocean Marine, Real Estate, Reinsurance and Shipping.

Letter Of Credit (Accounting)

Conditional bank commitment issued on behalf of a customer to pay a third party in accordance with certain terms and conditions. The two primary types are commercial letters of credit and standby letters of credit.

Letter Of Credit (Accounting Terms)

Conditional bank commitment issued on behalf of a customer to pay a third party in accordance with certain terms and conditions. The two primary types are commercial letters of credit and standby letters of credit.

Letter Of Credit (Bonds)

Bank credit facility wherein the bank agrees to lend a specified amount of funds for a limited term. For example, a bank providing an irrevocable direct pay letter of credit both lends its own credit rating to the issue and agrees to pay investors on each interest payment, date. The bank will be reimbursed by the issuer.

Letter Of Credit (Business)

A letter issued by a bank that can be presented to another bank to authorize the issue of credit or money.

Letter Of Credit (Commercial Real Estate)

A pledge or a commitment made by a lender or other party at the request of a party to honor drafts or any other payment.

Letter Of Credit (International Economics)

A common means of payment in international trade, this is a written commitment by a bank to make payment to an exporter on behalf of an importer, under specified conditions.

Letter Of Credit (Ocean Marine)

A document issued by the buyer’s bank, through its foreign correspondent bank, establishing a credit against which the seller may draw after complying with specific instructions.

Letter Of Credit (Real Estate)

A commitment by a bank or other person that the issuer will honor drafts or other demands for payment upon full compliance with the conditions specified in the letter of credit. Letters of credit are often used in place of cash deposited with the landlord in satisfying the security deposit provisions of a lease.

Letter Of Credit (Reinsurance)

A financial guaranty issued by a bank that permits the party to which it is issued to draw funds from the bank in the event of a valid unpaid claim against the other party; in reinsurance, typically used to permit reserve credit to be taken with respect to non-admitted reinsurance; and alternative to funds withheld and modified coinsurance.

Letter Of Credit (Shipping)

1. A financial document issued by a bank at the request of the consignee guaranteeing payment to the shipper for cargo if certain terms and conditions are fulfilled. Normally it contains a brief description of the goods, documents required, a shipping date, and an expiration date after which payment will no longer be made.- An Irrevocable Letter of Credit is one which obligates the issuing bank to pay the exporter when all terms and conditions of the letter of credit have been met. None of the terms and conditions may be changed without the consent of all parties to the letter of credit.- A Revocable Letter of Credit is subject to possible recall or amendment at the option of the applicant, without the approval of the beneficiary.- A Confirmed Letter of Credit is issued by a foreign bank with its validity confirmed by a U.S. bank. An exporter who requires a confirmed letter of credit from the buyer is assured payment from the U.S. bank in case the foreign buyer or bank defaults.- A Documentary Letter of Credit is one for which the issuing bank stipulates that certain documents must accompany a draft. The documents assure the applicant (importer) that the merchandise has been shipped and that title to the goods has been transferred to the importer.
2. An instrument of audit issued by the buyer's bank, at the buyer's request, in which the issuing bank promises to pay the seller upon presentation of documents stipulated in the terms and conditions of the audit

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