A scheme defining the different types of Letters of Credit.
2015-07-15
lcTypeScheme
1-0
http://www.fpml.org/coding-scheme/lc-type
http://www.fpml.org/coding-scheme/lc-type-1-0
http://www.fpml.org/coding-scheme/lc-type-1-0.xml
Code
63
Source
Description
key
Commercial
FpML
A Letter of Credit that provides a means of facilitating payments between parties in the normal course of business, supporting the shipment of and payment for goods. Commercial Letters of Credit are intended to be drawn on.
Standby
FpML
A Letter of Credit the purpose of which is to provide credit support only in the event of a performance default by the account party (i.e. the borrower) or some other contingent event. The Standby Letter of Credit supports an obligation to make a payment to the beneficiary.
Synthetic
FpML
A Letter of Credit under a facility that has been "pre-funded" by the lenders on the closing date (with the proceeds from such funding typically being deposited in a cash collateral account) rather than being funded on a later date upon the occurrence of a contingent event requiring payment under the L/C to the third party.