A standby letter of credit is the bank’s undertaking of fulfilling the applicant’s obligations.
A standby letter of credit is issued as collateral and is therefore not intended to be used as a primary payment method, unlike a commercial letter of credit.
A standby letter of credit will be liquidated only if the applicant default of its responsibilities under the underlying contract. As a result, the standby letter of credit serves as a secondary payment option.
On today’s post, I would like to share a standby letter of credit sample in swift format.
Recently I have explained the reason why I have started to put sample letters of credit on my website.
Please read our previous article titled “Sample Letters of Credit – Part I” “Introduction to working with a letter of credit sample” to understand pros and cons of lc samples.
I also highly recommend you to read “Sample Letters of Credit – Part II” – “Guidelines How to read sample letter of credit texts on my web site” before starting to study my standby letter of credit sample.
*********************SWIFT AUTH. CORRECT************************
Bcode:00980
BIC : CDCSUS33ENJ – CDCS BANK , N.A.
Transfer Date/Time : 2012-08-10-09.30.53.197333
Type: 700 Pri. :02
ISSUE OF A DOCUMENTARY CREDIT
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MESSAGE BODY
27: Sequence of Total
1/1
40A: Form of Documentary Credit
IRREVOCABLE STANDBY
20: Documentary Credit Number
DC46492
31C: Date of Issue/Transfer of The Credit
120824
40E: Applicable Rules
UCP LATEST VERSION
31D: Date and Place of Expiry
130610 AT OUR COUNTERS
50: Applicant
NORTH AMERICAN IMPORTER OF BEVERAGES INC.
3775 PARKINSON STREET, UNIT 25
EDISON AND TESLA, NJ 08000 USA
59: Beneficiary
ITALIAN COLD BUT HOT DRINKS SRL.
INDUSTRIAL AREA
39000
MILAN – ITALY
32B: Currency Code / Amount
USD500000,
39A: Percentage Credit Amount Tolerance
10/10
41D: Available With … By …
CDCS BANK, National Association
BY PAYMENT
42C: Drafts at..
SIGHT
42D: Drawee
CDCS BANK, National Association
47A: Additional Conditions
KINDLY FORWARD TO YOUR BRANCH : MILAN COMMERCIAL BRANCH ITALY BENEFICIARY’S COMPLETE NAME AND ADDRESS: ITALIAN COLD BUT HOT DRINKS SRL.INDUSTRIAL AREA 39000 MILAN – ITALY
WE HEREBY ESTABLISH OUR IRREVOCABLE STANBY LETTER OF CREDIT NO 18117915-00-000 IN FAVOR OF BENEFICIARY FOR THE ACCOUNT OF NORTH AMERICAN IMPORTER OF BEVERAGES INC.IN AN AMOUNT NOT TO EXCEED USD500.000,00(FIVE HUNDRED THOUSAND AND 00/100 US DOLLARS)PLUS OR MINUS TEN PERCENT, AVAILABLE FOR PAYMENT AT OUR COUNTERS AT 200 SECOND AVENUE, 3RD FLOOR, BANKING HEAD QUARTER BUILDING PITTSBURGH USA AVAILABLE BY BENEFICIARY’S SIGHT DRAFT DRAWN ON CDCS BANK , NATIONAL ASSOCIATION, ACCOMPANIED BY BENEFICIARY’S STATEMENT AS FOLLOWS :
“I (INSERT NAME AND TITLE) CERTIFIED THAT I AM AN AUTHORIZED REPRESENTATIVE OF ITALIAN COLD BUT HOT DRINKS SRL. AND HEREBY DEMAND PAYMENT OF USD (INSERT AMOUNT) UNDER CDCS BANK , NATIONAL ASSOCIATION LETTER OF CREDIT NO 18117915-00-000. I FURTHER CERTIFY THAT THE AMOUNT OF OUR DEMAND REPRESENTS THE AMOUNT DUE US AS A RESULT OF THE FAILURE OF NORTH AMERICAN IMPORTER OF BEVERAGES INC. TO PERFORM IN ACCORDANCE WITH CONTRACT ORGANIC FOODS SALES PROGRAMME 2012-2014 FROM MILAN ITALY TO NEW JERSEY USA.
DRAFTS DRAWN UNDER THIS LETTER OF CREDIT MUST BE MARKED : “DRAWN UNDER CDCS BANK, NATIONAL ASSOCIATION, STANDBY LETTER OF CREDIT NO : 18117915-00-000 DATED 12.AUGUST.2012.
PARTIAL DRAWINGS ARE PERMITTED.
THIS LETTER OF CREDIT WILL EXPIRE AT OUR COUNTERS 200 SECOND AVENUE, 3RD FLOOR, BANKING HEAD QUARTER BUILDING PITTSBURGH USA ON MAY 01.2013 AT 5.00 PM EASTERN TIME.
THIS CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (2007 VERSION) INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO 600.
WE HEREBY ENGAGE WITH YOU THAT DRAWINGS PRESENTED UNDER AND IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS CREDIT WILL BE DULY HONORED.
71 B : Charges and Fees
OTHER THAN THE ISSUING BANKS ARE FOR THE ACCOUNT OF THE BENEFICIARY. ISSUING BANK’S CHARGES ARE FOR THE ACCOUNT OF THE APPLICANT.
49 : Confirmation Instructions
Without
SAC
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