letter of credit

noun

1. an order issued by a banker allowing a person named to draw money to a specified amount from correspondents of the issuer.

2. an instrument issued by a banker authorizing a person named to make drafts upon the issuer up to an amount specified.

letter of credit

noun

1. a letter issued by a bank entitling the bearer to draw funds up to a specified maximum from that bank or its agencies

2. a letter addressed by a bank instructing the addressee to allow the person named to draw a specified sum on the credit of the addressor bank

Word History and Origins

Origin of letter of credit¹

First recorded in 1635–45

Example Sentences

The lending to the units is backed by a letter of credit from another bank, according to filings in bankruptcy court in Houston.

Read more on The Wall Street Journal

The French bank, which did business in Sudan from the late 1990s until 2009, provided letters of credit that allowed Sudan to honor import and export commitments.

Read more on Barron's

A lawyer for James, Dennis Fan, in response called Trump's filing "procedurally improper" and argued Trump has not explained why he can't post his real estate or obtain a letter of credit.

Read more on Salon

The bill would also limit the value of security deposits and letters of credit required for commercial leases.

Read more on Seattle Times

While customers usually pay up front and in dollars, "we had to resort to letters of credit with those buyers from Pakistan", said Muthaura.

Read more on Reuters