The Account party must provide an acceptable guarantee for the beneficiary to pay a certain sum to him/her in the occurrence of specific terms.
Considering applications of letter of credit, preventing from the assignment of revenues leads to valid and significant benefits for the account party.
When the seller is the beneficiary of the letter of credit, he/she can use it as a pledge to in favor of account party seller(for example the producer of raw materials of a product).
To make payment on behalf of the account party, in the event that the account party fails to fulfill its obligation to the beneficiary.
The credit equivalent amount of an acquisition of a risk participation in a direct credit substitute is assigned to the risk category appropriate to the account party obligor or, if relevant, the nature of the collateral or guarantees.