Transferable Letter Of Credit. Letters of credits are seen as protecting covenants that ensure that payment is made to the supplier of those particular goods and services. Transfer may be either full or partial.
This is possible when the credit clearly states it is transferable no other term is acceptable. When a letter of credit is transferable the original or first beneficiary is allowed to transfer all or a part of the value of the letter of credit to a third party otherwise known as the second beneficiary. Transfer of a credit is allowed only once.
In a transferable letter of credit the rights and obligations of the beneficiary are transferred to another party usually a manufacturer or wholesaler.
When a letter of credit is transferable the original or first beneficiary is allowed to transfer all or a part of the value of the letter of credit to a third party otherwise known as the second beneficiary. The beneficiary cannot alter any terms in the lc without the applicants consent. Quick and simple way to purchase goods. What is a transferable letter of credit.