Letter of credit

(LC). A promise document issued by a bank or another issuer to a third party to make a payment on behalf of a customer in accordance with specified conditions. Letters of credit are frequently used in international trade to make funds available in a foreign location.

See also

• Advising bank
• Clean letter of credit
• Commercial risk
• Condition
• Confirmed letter of credit
• Confirming bank
• Credit
• Documentary credit
• Irrevocable letter of credit
• Issuing bank
• LOC backed
• Standby letter of credit