Irrevocable letter of credit


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Irrevocable letter of credit

Assurance of funds issued by a bank that cannot be canceled or amended without the beneficiary's approval.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Irrevocable Letter of Credit

A letter of credit that neither the bank granting it nor the letter holder (who is the buyer of some good) may cancel under any circumstances. This provides the seller with extra assurance that he/she will be paid on time and in the correct amount. Irrevocable letters of credit are most common in international commerce.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Irrevocable Letter of Credit (ILC)--Much the same as a CILC; however, since it has not been confirmed, the financial responsibility for payment lies with the bank that opened the Letter of Credit.
As the buyer and as the bank's customer, Sztejn contracted for an irrevocable letter of credit with Schroder Banking Corporation.
However, in connection with the leaseback, Company B requires Company A to provide an irrevocable letter of credit securing a portion or all of the lease payments in the event of a lease default.
Templates currently are in place for several documents, including the Certificate of Insurance For Closure and/or Post-Closure Care; Certificate of Liability Insurance; Corporate Guarantee For Liability Coverage; Closure and/or Post-Closure Care; Financial Guarantee Bond; Irrevocable Letter of Credit (Closure and/or Post-Closure); Irrevocable Letter of Credit (Operating); Performance Bond and the Trust Agreement/Standby Trust Agreement.
Each agreement, for additional hybrid thermal power plants with power from 10 to 35 megawatts, will be a separate deal under its own contract and should include the 10% up front payment and the balance secured by an irrevocable letter of credit..
Funds can be in the form of cash, cash equivalents or an irrevocable letter of credit.
Terms: irrevocable Letter of Credit. Member: Chamber of Commerce and Industry.
The order was secured by an irrevocable letter of credit from the Bank of Riyad, but guaranteed and paid by one of the largest banks in our country, with offices in New York.
Issues of money and currency are less likely to be a problem, says Owsley, if the company has an irrevocable letter of credit between banks.
The customary solution is to provide in the letter of credit that "it shall automatically be extended for periods of at least one year from the present and each future expiration date unless the bank gives to the landlord, by certified mail, return receipt requested, no later than 30 days prior to the relevant expiration date, notice that the bank elects not to renew this irrevocable letter of credit." Presumably, upon receipt of such notice, the landlord will instruct the tenant to renew the current letter of credit before it expires, and if the tenant does not do so, the landlord will be able to draw on the existing letter of credit before it expires.
Also included in the changes is a more lenient term on performance security, which is at 10 percent of the participant's capital and operational spending, only this time, the government has agreed to accept an irrevocable letter of credit from lenders.