Back-To-Back Letters Of Credit
- Back-To-Back Letters Of Credit
- Two letters of credit (LCs) used together to help a seller finance the purchase of equipment or services from a subcontractor. With the original LC from the buyer's bank in place, the seller goes to his own bank and has a second LC issued, with the subcontractor as beneficiary. The subcontractor is thus ensured of payment upon fulfilling the terms of the contract.
Like most LCs, back-to-back LCs are used primarily in international transactions, with the first LC serving as collateral for the second.
Investment dictionary.
Academic.
2012.
Look at other dictionaries:
back-to-back credit — Also known as counter credits. A credit operation involving the use of two separate letters of credit. A letter of credit is issued at the seller s request to his own supplier (sometimes called the secondary credit), against a letter of credit… … Law dictionary
back-stop — USA A term used in the financial industry to mean credit support or backup funds for a financial instrument or transaction. For example, letters of credit are often issued to backstop commercial paper in the event that the commercial paper issuer … Law dictionary
Credit default swap — If the reference bond performs without default, the protection buyer pays quarterly payments to the seller until maturity … Wikipedia
Credit enhancement — Securities Securities Bond Stock Investment fund Derivative Structured finance Agency security … Wikipedia
Back to Methuselah — (A Metabiological Pentateuch), by George Bernard Shaw consists of a preface (An Infidel Half Century) and a series of five plays: In the Beginning: B.C. 4004 (In the Garden of Eden), The Gospel of the Brothers Barnabas: Present Day, The Thing… … Wikipedia
Credit card — Personal finance Credit and debt Pawnbroker Student loan Employment contract Salary Wage Empl … Wikipedia
Credit rating agency — Corporate finance … Wikipedia
Crédit Mobilier of America scandal — The Crédit Mobilier scandal of 1872 involved the Union Pacific Railroad and the Crédit Mobilier of America construction company in the building of the First Transcontinental Railroad. The distribution of Crédit Mobilier shares of stock by… … Wikipedia
Credit unions in the United States — Banking in the United States Monetary policy The Federal Reserve System Regulation Lending Credit card Deposit accounts Savings account Checking account Money market account Certificate of deposit … Wikipedia
standby letter of credit — An obligation issued by a bank on behalf of a bank customer to a third party. A standby letter of credit is a bank promise to pay the third party in the event of some defined failure by the bank s customer, usually, but not always, a failure to… … Financial and business terms
