Confirmed Letter of Credit


Also found in: Acronyms.

Confirmed Letter of Credit

A letter of credit which a bank other than the bank that opened it agrees to honor as though they had themselves issued it. This additional confirmation is in addition to the obligation of the bank which issued the letter of credit.

Confirmed Letter of Credit

A letter of credit guaranteed by two banks. That is, a bank agrees to honor the letter of credit and make the required payment in case both the letter's holder and the original, issuing bank both fail to make payment. This reduces the risk of the letter of credit to an absolute minimum.
References in periodicals archive ?
Due to the size and risks associated with a contract of this nature, the Company obtained a confirmed letter of credit to secure payment.
The payment terms for these contracts has been accepted as 50% cash-in-advance and the remaining balance paid through an irrevocable confirmed letter of credit.
This order is financed by an irrevocable confirmed letter of credit and is to be fulfilled by May 13, 2003.