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В§ 13.12. Standby letters of credit.

(a) meaning. As found in this area, the word standby letter of credit means a page of credit, or similar arrangement but called or described, which represents an responsibility to your beneficiary regarding the the main issuing organization to settle cash lent by or advanced to or even for the account associated with the account party, or even to make repayment due to an indebtedness undertaken by the account celebration, or even to make repayment due to a standard (including a declaration of standard) because of the account celebration within the performance of a responsibility. The expression will not add commercial letters of credit and comparable instruments in which the institution that is issuing the beneficiary to attract upon the organization, that do not guaranty re payment of a cash responsibility associated with account celebration and that do not offer that re payment is occasioned by standard regarding the area of the account party.

(b) Restriction. a letter that is standby of granted by the organization will be coupled with other standby letters of credit and loans for purposes of using the appropriate limits on loans associated with organization under part 306 associated with work (7 P. S. В§ 306). In which the standby page of credit is at the mercy of a nonrecourse participation contract along with other organizations or banking institutions, this part pertains to the issuing organization and every other participant that is an organization very much the same as with the scenario of a participated loan.

(c) Exceptions. Standby letters of credit will probably be at the mercy of subsection (b) except where among the following conditions occur:

(1) just before or during the time of issuance, the issuing organization is compensated a sum corresponding to the institutions optimum liability beneath the page of credit. Read the rest of this entry »