Letter of Credit Flowchart

Letter of Credit Flowchart - When payment (#5) is due from...

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LETTER OF CREDIT FLOWCHART Definition: Letters of Credit have been the cornerstone of international trade since the early 1900s. It is a written instrument provided by a bank (Issuing Bank) at the request of its customer (Applicant/Importer) whereby the Issuing Bank promises to pay the Beneficiary/Exporter for goods or services once the Beneficiary/Exporter provides all required documents and meets all other terms and conditions set forth in the Letter of Credit. Final Payment from Issuing Bank to Advising/Confirming Bank:
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Unformatted text preview: When payment (#5) is due from Furniture Brands International, Inc. (FBI), according to the terms of the Letter of Credit, to the Beneficiary/Exporter, the Issuing Bank advances the payment under FBIs $550,000,000 Revolving Line of Credit and then wires the money to the Advising/Confirming Bank. Once this payment is received by the Advising/Confirming Bank, this bank deposits the payment to the Beneficiary/Exporters deposit account. The sale is now complete....
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This note was uploaded on 08/22/2009 for the course FIN 3310 taught by Professor Potts during the Spring '08 term at Baylor.

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