Document background
The Evergreen Letter of Credit is a sophisticated financial instrument used when parties require a long-term, automatically renewing payment guarantee. This document type is particularly valuable in ongoing commercial relationships where continuous financial security is necessary, such as long-term lease agreements, recurring supply contracts, or extended service arrangements. Governed by U.S. law, particularly the Uniform Commercial Code Article 5 and federal banking regulations, it provides a robust framework for automatic renewal of the credit period unless specific termination notice is given. The document includes critical elements such as the credit amount, renewal terms, drawing conditions, and notice requirements. It offers greater efficiency compared to standard letters of credit by eliminating the need for periodic manual renewals while maintaining the same level of security and enforceability under U.S. jurisdiction.
