Professional Service. Page prepared September 2025. All LC issuance is subject to bank underwriting and approval.
Transferable, Red Clause, Green Clause & Deferred Payment Letters of Credit
We arrange issuance under UCP 600, add confirmation where needed, and align documentation to reduce refusals. For applicants that need to fund cash margin, we can structure separate private credit solutions, subject to underwriting.
Issuing Bank Categories
Investment-grade international banks, strong regional commercial banks, and specialist trade correspondent banks with experienced documentary units and live SWIFT.
When This Fits
Intermediated supply chains (transferable), pre-shipment working capital (red clause), storage/warehouse finance (green clause), or contracts requiring bank deferred payment undertakings (deferred payment LCs).
Margin Funding
Where issuers request cash margin, we can arrange a margin finance line or borrowing base facility. Separate approvals, covenants, and controls apply.
Transferable Letter of Credit — Indicative Term Sheet
| Item | Term | Notes |
|---|---|---|
| Instrument | Irrevocable DLC marked “Transferable” | Under UCP 600; transfer allowed by first beneficiary |
| Use Case | Intermediary distributes credit to second beneficiary(ies) | Common in trading and sourcing chains |
| Transfer Mechanics | Whole or partial transfer | Unit price, expiry, shipment dates may be adjusted within rules |
| Tenor | Sight or 30–180 days usance | Usance discounting only after acceptance |
| Confirmation | Optional by confirming bank | Mitigates issuer/country risk for beneficiaries |
| Cash Margin | % of face value, deal specific | Margin finance may be arranged |
| Controls | Assignment of proceeds, aligned doc lists, buffer windows | Avoids presentation clashes |
| Fees | Issuance/confirmation set by banks | Arrangement & underwriting — request a quote |
Red Clause Letter of Credit — Indicative Term Sheet
| Item | Term | Notes |
|---|---|---|
| Instrument | DLC with pre-shipment advance clause | Advance to beneficiary against stated documents |
| Use Case | Working capital for production or procurement prior to shipment | Advance reduces exporter cash strain |
| Advance Amount | Cap as % of LC value | Often 10–20%, case specific |
| Security | Undertakings, inspection, insurance evidence | Repayment via LC proceeds |
| Tenor | Sight or usance | Usance discounting possible after acceptance |
| Confirmation | Optional | May improve advance appetite |
| Cash Margin | Typically higher than standard DLC | Margin finance available case by case |
| Fees | Advance handling, issuance, confirmation | Arrangement & underwriting — request a quote |
Green Clause Letter of Credit — Indicative Term Sheet
| Item | Term | Notes |
|---|---|---|
| Instrument | DLC with storage/warehouse advance clause | Advance against warehouse receipts and storage docs |
| Use Case | Goods financed in storage prior to shipment | Common in commodity trades |
| Advance Amount | Cap as % of LC value/NOLV | Daily marks/inspection may apply |
| Controls | Collateral Management Agreement (CMA), insured storage | Loss-payee endorsements required |
| Tenor | Sight or 30–180 days usance | Discounting only after acceptance for usance |
| Confirmation | Optional | Used where issuer/country risk needs cover |
| Cash Margin | Deal specific | Margin finance available for eligible applicants |
| Fees | Issuance/confirmation, warehouse control fees | Arrangement & underwriting — request a quote |
Deferred Payment Letter of Credit — Indicative Term Sheet
| Item | Term | Notes |
|---|---|---|
| Instrument | Irrevocable LC with deferred payment undertaking | No drafts; bank promises to pay on a future date |
| Use Case | Contracts requiring bank deferred payment instead of acceptance/drafts | Common in equipment and commodity shipments |
| Tenor | 30–180 days (or per deal) | Payment at stated maturity |
| Confirmation | Optional | Adds confirming bank undertaking at maturity |
| Early Funding | “Discounting” of deferred payment undertaking | Only after undertaking is established on compliant docs |
| Cash Margin | % of face value | Margin finance may be arranged |
| Controls | Assignment of proceeds, insured cargo, aligned doc list | Reduce refusal and delay risk |
| Fees | Issuance/confirmation priced by banks | Arrangement & underwriting — request a quote |
Process And Timeline
Share trade summary, corridor, draft LC wording, shipment plan, and beneficiary chain (if transferable/red/green). We run preliminary KYC and sanctions checks.
Provide audited financials, corporate docs, contracts, inspection and insurance terms, warehouse/CMA details (for green clause), and any transfer instructions.
We outline proposed structure (transferable/red/green/deferred), bank categories, tenor guidance, confirmation need, and margin requirement. Arrangement fee: request a quote.
Issuing bank assesses credit, corridor, and LC text. Confirming bank reviews risk where confirmation is requested. For transferables, transfer mechanics are validated.
If cash margin is required, applicant funds it or applies for margin finance. Separate approvals, covenants, and reporting apply.
Finalize LC text, document lists, inspection/insurance SLAs, warehouse receipts/CMA (green), advance conditions (red), and transfer instructions (transferable).
LC issued via SWIFT and advised. For transferables, transfer is effected by the nominated bank per instructions.
Confirming bank adds an irrevocable undertaking where limits allow and risk requires.
Beneficiary ships goods or evidences storage (green). Documents presented per LC; banks examine within UCP 600 timelines.
For usance/deferred: bank acceptance or deferred payment undertaking established; payment at maturity. Early funding only applies after acceptance/undertaking. For sight: pay on compliant presentation.
Provide settlement confirmations, amendments, and performance reporting for audit and covenant compliance.
Request A Proposal
Send your draft LC wording, contracts, shipment or storage plan, and corridor details. We structure transferable, red clause, green clause, or deferred payment LCs, select credible issuers and confirming banks, and arrange margin funding if needed. Underwriting and arrangement fees are quoted after review.
Request A ProposalDisclaimer. All terms are indicative. Final issuance, confirmation, and pricing are determined by banks after credit approval. Margin finance is a separate facility subject to its own underwriting. Documentation quality, control mechanics, and corridor risk drive capacity, timing, and cost.
