Document background
The Letter of Credit Promissory Note is a specialized financial instrument used in international trade finance, particularly relevant under Dutch law and banking regulations. This document type emerged from the need to provide additional security and negotiability in letter of credit transactions. It combines the payment security of a letter of credit with the negotiable characteristics of a promissory note, making it particularly valuable for cross-border transactions. The instrument is typically used when parties require both the security of bank-backed payment and the flexibility to negotiate or discount the payment obligation. It must comply with both Dutch national law and international banking practices, including UCP 600 guidelines and international conventions on negotiable instruments. The document includes specific payment terms, conditions, and documentary requirements, while maintaining the unconditional payment promise characteristic of promissory notes.
