Standby Letters of Credit
Three pieces on section C9.9.1.5.4 of the Security Assistance Management Manual: what a standby letter of credit for termination liability is and who may use one, how it is applied for, accepted and put in place, and how DSCA draws on it, adjusts it and closes it out.
Three pieces in this topic
The standby letter of credit for termination liability
A bank’s independent undertaking to DSCA that offsets termination liability, open to dependable undertaking partners but not to FMF grant users.
02Setting up a standby letter of credit
An invitation or a request, a complete application, a signed decision from the CFO, formal acceptance on three documents, then revised payment schedules.
03Drawing on and ending a standby letter of credit
A single demand document is enough, each drawing reduces what is left, and the amount is checked every quarter against termination liability.
Key terms in this topic
Standby letter of credit (SBLC)Termination liability (TL)Confirming bankISP 98Memorandum of AgreementSBLC applicationApproval as modifiedDesignation of authorityTerms and Conditions AgreementConfirmationDemand for paymentDrawdownAutomatic extensionSequestrationCloseout
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- Letters of Request 3 pieces
- Eligibility and Scope of Sale 3 pieces
- Pricing, Payment and Billing 3 pieces
- Case Changes and Reviews 3 pieces
- Case Closure 2 pieces
- Financing and the Trust Fund 3 pieces
- Writing the Agreement 3 pieces
- Multinational Sales 3 pieces
- Case Development Controls 3 pieces
- Before the Case Is Written 3 pieces
- Line Level Financial Review 3 pieces
- Contracting for a Case 3 pieces
- Cooperative Programs and Contributions 3 pieces
- Pricing Services and Support 3 pieces
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- Billing and Cost Recovery 3 pieces
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- Pricing Articles and Offers 5 pieces
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