Letter of Credit

 

The Letter of Credit is an internationally accepted payment form which is always related to a commercial transaction. By the order of the buyer, the letter of credit opening Bank undertakes an irrevocable payment obligation to the seller upon presentation of credit conform documents in due time.  Besides opening letters of credit, when the letter of credit is opened by other banks in favor of the seller, UniCredit Bank provides advising and confirmation services to its clients.

 

Why is it advantageous?

• the most transparent payment method
  
• the legal relationship based on a letter of credit  is independent from the underlying commercial transaction
  
• provides maximum security in foreign trade transactions

 

Whom do we recommend it to?

• who wishes to minimize the risk of (foreign) trade transactions (eg. The type of the good is high value machinery/equipment or the risk of the counterparty/country is high)
  
• whose trading activity implicates long  geographical distance  in large amounts
  
• who trades with unknown and/or new partners
  
• who trades in a region where some local regulation requires the usage of letters of credit

 

If you are the importer/buyer

• Our Bank irrevocably undertakes to  pay the amount defined in the letter of credit against presentation of required documents specified in the letter of credit in favor of your company’s foreign and domestic partners
  
• Payment obligation will only arise if the requirements of the letter of credit is fulfilled
  
• Your company may be in a better bargaining position or even longer payment terms could be available if you offer the payment method by means of letter of credit
  
• in case of letter of credit with deferred payment the liquidity of your company can be improved

 

If you are the exporter/ seller

• In case of export letter of credit opened in favor of your company, the issuing bank undertakes an irrevocable payment obligation against presentation of credit conform documents.
  
• you can request our bank to confirm your letter of credit, thus we take over the political (bank and country) and payment risks
  
• you have the opportunity to discount your deferred payment letter of credit, even without recourse up to 100% of the counter value of the documents
  
• you can require the pre-financing of your export letter of credit (with recourse)
  
• On your request our bank provides assistance to your trade business with letter of credit payment method, during the whole transaction i.e. from signing the contract until finishing the transaction, furthermore our Bank offers the service of preparing and making comments of the draft of the letter of credit, preliminary examination of documents.

 

If you are interested in our products, please feel free to ask your contact person at the bank, or contact the Trade Finance Department of our bank on tradeservices@unicreditgroup.hu email address or on the +36 1 301 1404 phone number. Further information about our bank and products is available on our website www.unicreditbank.hu.

UniCredit Bank Hungary Zrt.

This information should not be considered an offer. The Bank reserves the right to change the terms and conditions. UniCredit Bank reserves the right to decide individually on loan disbursement and on the amount and conditions thereof, based on the loan application and documents submitted.