Unconfirmed Letter of Credit


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Related to Unconfirmed Letter of Credit: Revocable letter of credit, Irrevocable letter of credit, Back to Back Letter of Credit

Unconfirmed Letter of Credit

A letter of credit which has not been guaranteed or confirmed by any bank other than the bank that opened it. The advising bank merely informs the beneficiary of the letter of credit terms and conditions.

Unconfirmed Letter of Credit

A letter of credit where only the bank issuing it has agreed to guarantee payment. This differs from a confirmed letter of credit, where at least two banks guarantee payment. This increases the risk for the bank that honors the letter of credit, as it only has one, rather than two, ways to seek recourse.
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