Direct Pay Standby Letters of Credit As a Credit Substitute

Direct Pay Standby Letters of Credit are used as payment guarantees to support and underlying credit facility. The entity that issues the Direct-pay Standby Letters of Credit - always a bank - assumes the credit risk of the Applicant of the letter of credit (what we would think of as the borrower). ?Drawings on a standby letter of credit do not require any proof regarding the performance or lack thereof by the Applicant.

puerto rico hosting