Professional Service. Term sheet prepared September 2025. LC issuance and confirmation are subject to bank underwriting and approval.
Confirmed Letter of Credit (LC) Term Sheet
Add a confirming bank’s irrevocable undertaking to an issued LC. Sight confirmations provide payment on compliant presentation. Usance confirmations provide payment at maturity, with the option for post-acceptance discounting when the deferred payment undertaking is accepted. Margin financing can be arranged separately for applicants that require cash margin support, subject to underwriting.
Why Add Confirmation
Transfers payment risk from the issuing bank and country to a confirming bank with appetite for the corridor. Strengthens seller confidence, unlocks capacity, and can improve pricing and tenor.
Bank Categories
Issuance by investment-grade international banks, strong regional commercial banks, or trade-focused correspondent banks. Confirmation by banks with limits for the issuer and country.
Margin Financing
Where cash margin is requested by the issuer, applicants may request a structured margin finance line or borrowing base facility. Separate approval and covenants apply.
| Indicative Confirmed LC Term Sheet | ||
|---|---|---|
| Item | Term | Comment |
| Applicant | Corporate buyer or trader with audited accounts | Minimum turnover and track record required |
| Instrument | Irrevocable Documentary LC under UCP 600 with confirmation | Sight:
payable on compliant presentation. Usance: payable 30–180 days at maturity. |
| Face Value | Deal dependent | Confirmed after credit approval |
| Tenor | Sight or 30–180 days | Longer maturities case by case |
| Availability | Single or revolving | Red or green clause considered with controls |
| Post-Acceptance Discounting | Available for usance LCs after acceptance | Discounts the accepted deferred payment undertaking |
| Cash Margin | % of LC face value, deal specific | Margin finance available for eligible applicants |
| Collateral & Controls | Assignment of proceeds, escrow waterfall, CMA or warehouse receipts where relevant | Insurance with loss-payee endorsements; negotiable B/L or equivalent title |
| Fees & Pricing | Issuance and confirmation fees set by banks | Arrangement and underwriting fees — request a quote |
| Documentation | Sales contract, invoice, packing list, B/L, inspection, insurance, certificate of origin | KYC, AML, and sanctions clearance mandatory |
| Conditions Precedent | Executed agreements, funded or financed margin, accepted LC text | All control mechanics in place prior to issuance |
| Governing Rules & Law | UCP 600; facility law and dispute forum specified | Local counsel opinions where required |
Process And Timeline
Submit draft LC text, trade file, corridor, and counterparty list. Preliminary KYC and sanctions screening conducted.
Provide audited financials, corporate documents, sales contracts, shipment plan, insurance, and inspection windows. Identify need for confirmation and target confirming bank categories.
Receive an indicative confirmed LC term sheet: issuer categories, proposed confirmation, tenor guidance, and margin requirement. Arrangement fee: request a quote.
Issuing bank completes credit review and agrees LC text and availability. Limits set by applicant profile and corridor.
Confirming bank reviews issuer and country, LC wording, and document list. Adds irrevocable undertaking subject to limits.
If cash margin is required, applicant funds it or applies for structured margin financing. Separate approvals and covenants apply.
Finalize LC text, document list, insurance endorsements, assignment of proceeds, and discrepancy cure mechanics to reduce refusal risk.
Issuing bank transmits the LC via SWIFT. Advising bank authenticates and notifies the beneficiary.
Confirming bank adds confirmation. Terms reflect issuer risk, country risk, and tenor.
Exporter ships and presents documents per LC. Banks examine documents within UCP 600 timelines. For usance, acceptance is issued for compliant presentations.
Sight: confirming bank pays on compliant presentation. Usance: payment at maturity. For usance, beneficiary may request discounting after acceptance.
Settlement confirmations, amendments, and compliance records provided for audit and covenant purposes.
Request Your Confirmed LC Term Sheet
Provide your draft LC text, contracts, and shipment plan. We align terms with bank requirements, arrange issuance by credible institutions, and secure confirmation to transfer payment risk. Margin financing can be structured for eligible applicants. Underwriting and arrangement fees are quoted after review.
Start Your LC RequestDisclaimer. This term sheet is indicative. Final issuance, confirmation, and pricing are determined by banks following credit approval. Margin financing is a separate facility subject to its own underwriting. Documentation quality and control mechanics influence pricing, eligibility, and capacity.
