Transferable Letter Of Credit

AAA

DEFINITION of 'Transferable Letter Of Credit'

A letter of credit that permits the beneficiary of the letter to make some or all of the credit available to another party, thereby creating a secondary beneficiary. The party that initially accepts the transferable letter of credit from the bank is referred to as the first beneficiary. The bank issuing the letter of credit must approve the transfer.

INVESTOPEDIA EXPLAINS 'Transferable Letter Of Credit'

The transfer of credit must be clearly outlined in the documentation of the letter. However, the letter of credit must state expressly that the credit is transferable. Otherwise, no credit can be transferred regardless of any other factors.

RELATED TERMS
  1. Synthetic Letter Of Credit

    A letter of credit that has been pre-funded by the bank on the ...
  2. Irrevocable Letter Of Credit - ...

    Correspondence issued by a bank guaranteeing payment for goods ...
  3. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a ...
  4. Sight Letter Of Credit

    A letter of credit that is payable once it is presented along ...
  5. Fully Funded Documentary Letter ...

    A written promise of payment provided by a buyer to a seller ...
  6. Netting

    Consolidating the value of two or more transactions, payments, ...
Related Articles
  1. What Is A Corporate Credit Rating?
    Investing Basics

    What Is A Corporate Credit Rating?

  2. What's the difference between a bank ...
    Investing

    What's the difference between a bank ...

  3. Mortgage Rates To Rise, But When And ...
    Investing Basics

    Mortgage Rates To Rise, But When And ...

  4. How Visa Counts On Your Free-Spending ...
    Stock Analysis

    How Visa Counts On Your Free-Spending ...

comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center