„Standby Letter of Credit“

A letter of credit which a bank issues on behalf of its customer to serve as a guarantee to the beneficiary of the letter of credit that the bank’s customer will perform a specified contract with the beneficiary. If the customer defaults, the beneficiary may draw funds against the letter of credit as penalties or as payments, whichever the terms of the credit provide.

Hinkelman, E.G. (2008). “Dictionary of International Trade: Handbook of the Global Trade Community Includes 21 Key Appendices”. Novato, CA: World Trade Press.