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To issue a Standby LC support by a counter guarante .

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Sun, 12/13/2015 - 21:52
guoking
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Joined: 10/01/2008
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Urgent Help!

Dear Experts,

 

We (a comm.bank), are requested by an overseas issuing bank to issue a  " Standby LC" to a beneficiary. However,  we are supported by the issuing bank which has  issued in our favor the "Counter Guarantee". Is it workable ?

.

Or, since we are supported by issuing bank's "Conter Guarantee", hence, we must need issuing bank also requesting us to issue a "Payment Letter of Gurantee" instead of requesting us to open a "Standby LC" ?

Thank you for your prompt assistance.

 

 

 

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Mon, 12/14/2015 - 05:51
#1
pan
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Joined: 09/13/2007
Rules of counter guarantee and Standby l/c

Hi Friend,

it depends on the rule applicable and the wording of both  documents. You are granting credit to the bank issuing the counterguarantee, so you have to be clever to assess the risk. I think it is more close to back to back l/c than guarantee. You must be obtain a document to avail the guarantee.

I/we need more details and you have to peruse documents together with your credit dept and advice by legal

dept too.

Other comments appreciated

Ciao

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