Letter of credit: Difference between revisions
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 1: | Line 1: | ||
{{ | {{a|security|}}{{lc capsule}} | ||
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
|
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