Letter of credit: Difference between revisions

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Often talked about, seldom seen, as [[credit support]] for a {{gmsla}}
Often talked about, seldom seen, as [[credit support]] for a {{gmsla}}

Latest revision as of 10:50, 1 October 2020

A word about credit risk mitigation
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An old fashioned form of credit support. A bank writes an unconditional letter promising to pay a (usually large) sum on money on demand and without argument to a third party on behalf of a client. This gets small companies a bit of breathing space with trade creditors. Banks charge through the nose for them: they are a form of committed funding.

Lots of formal rules and legal form-obeisance.

Often talked about, seldom seen, as credit support for a 2010 GMSLA

See also