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Cash Collateral Letter Of Credit
"I need a Cash Collateral Letter of Credit for our Hong Kong manufacturing company to secure a USD 2 million purchase of machinery from a German supplier, with 100% cash collateral in HKD to be maintained throughout the validity period until March 2025."
1. Date and Parties: Date of issuance, issuing bank details, applicant details, and beneficiary details
2. Letter of Credit Number: Unique reference number for the L/C
3. Amount and Currency: Maximum value of the L/C and currency denomination
4. Cash Collateral Details: Amount of cash collateral, currency, and deposit requirements
5. Collateral Ratio: Required ratio of collateral to L/C value
6. Expiry Date: Validity period of the L/C
7. Available With/By: Terms of availability and method of payment
8. Beneficiary Claims Process: Procedure for making claims under the L/C
9. Required Documents: List of documents required for claims
10. Bank's Rights and Security Interest: Bank's rights over the cash collateral
11. Governing Law and Jurisdiction: Specification of Hong Kong law and jurisdiction
1. Partial Drawings: Include when multiple partial drawings are permitted under the L/C
2. Transferability: Include when the L/C can be transferred to other beneficiaries
3. Interest on Collateral: Include if interest is payable on the cash collateral
4. Auto-renewal Clause: Include for L/Cs that can be automatically renewed
5. Foreign Exchange Provisions: Include when collateral and L/C currencies differ
6. Additional Security: Include when additional forms of security are required besides cash
7. Force Majeure: Include specific force majeure provisions beyond standard UCP 600 terms
1. Schedule 1 - Form of Demand: Standard format for making claims under the L/C
2. Schedule 2 - Required Documents: Detailed list and specifications of required documents for claims
3. Schedule 3 - Fee Schedule: Detailed breakdown of all applicable fees and charges
4. Schedule 4 - Collateral Payment Instructions: Bank account details and procedures for depositing collateral
5. Appendix A - UCP 600 Incorporation: Specific UCP 600 articles incorporated by reference
6. Appendix B - Authorized Signatories: List of authorized signatories for the applicant and their specimen signatures
Authors
Banking and Financial Services
International Trade
Manufacturing
Import/Export
Retail
Wholesale
Construction
Energy
Commodities
Shipping and Logistics
Agriculture
Technology
Legal
Finance
Treasury
International Trade
Risk Management
Compliance
Trade Operations
Credit
Commercial Banking
Documentary Credits
Trade Finance Manager
Chief Financial Officer
Treasury Manager
Finance Director
Import/Export Manager
Credit Risk Officer
Banking Relationship Manager
Trade Operations Manager
Compliance Officer
Legal Counsel
Documentary Credits Specialist
Commercial Banking Officer
Senior Trade Finance Executive
International Business Development Manager
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