Standby LCs
Standby LCs Are Good Business – If You Know What You Are Doing!
Proposed EU Capital Requirements Regulation changes may raise credit conversion factor for standby letters of credit. Limited data suggests low default rates. Banks issue standbys for fees, and despite credit risk, many expire unused.
UCP and Standbys
Use of UCP600 for standbys continues, despite there being better suited rules in ISP98
Standbys without Expiration Dates
What can you, as a US bank, do when a customer tells you that they need you to issue a
Case Illustrates Perils of Drafting LC Draw Caps and Handling Non-Standard LC Transactions
In Natixis Funding Corp. v. GenOn Mid-Atlantic, the 5th Circuit addresses crucial aspects of letter of credit practice, exploring prepayment, collateralization, structured finance, indemnities, good faith limits, and consequences of drafting errors.
Eurobank Ergasias S.A. v. Bombardier Inc.:
Guarantors Caught Between Home Courts That Do Not Apply the Fraud Exception and Courts in the Counter-Guarantor's Country
Project Stewart, LLC v. JPMorgan Chase Bank, N.A. [2022]
Beneficiary sued Issuer for Wrongful Dishonor.
KEB Hana Bank v. Korea Export Insurance Corporation [2022]
Standby LC Issuer sued Counter Guarantor on Extend or Pay Request.
Issuing Standbys Allowing for Presentation of Documents by Email
At the IIBLP’s 2022 Annual LC Survey – West conference (18-19 May), delegates were asked about the general frequency in which their bank issues standbys allowing for documents to be presented electronically. Here, Buddy Baker of Goldman Sachs Bank comments on the poll results.
