В§ 13.12. Standby letters of credit.

(a) Definition. As found in this part, the word standby letter of credit means a letter of credit, or comparable arrangement but called or described, which represents an responsibility into the beneficiary from the the main issuing organization to settle cash lent by or advanced to or even for the account associated with account party, or to make repayment because of an indebtedness undertaken because of the account party, or even to make repayment because of a standard (including a declaration of standard) because of the account celebration into the performance of a obligation. The definition of will not add commercial letters of credit and comparable instruments where in fact the issuing organization expects the beneficiary to draw upon the organization, that do not guaranty re re payment of a cash obligation associated with the account party and that do not offer that re re re payment is occasioned by standard in the the main account celebration.

(b) limitation. a letter that is standby of released by an organization will be coupled with other standby letters of credit and loans for purposes of using the appropriate limits on loans associated with institution under part 306 for the work (7 P. S. В§ 306). Where in fact the standby page of credit is susceptible to a nonrecourse involvement agreement along with other organizations or banking institutions, this area pertains to the issuing organization and every other participant that will be an organization very much the same as with the actual situation of a participated loan.

(c) Exceptions. Standby letters of credit will probably be at the mercy of subsection (b) except where one of several conditions that are following:

(1) ahead of or during the time of issuance, the issuing organization is compensated a sum corresponding to the institutions optimum liability underneath the letter of credit. Plus »