transferable letter of credit

(banking) A letter of credit where the beneficiary specified in the credit has the option of instructing his bank to transfer the credit fully or in part to another beneficiary.
A letter of credit can only be transferred if it is expressly designated as “transferable” by the issuing bank. This type of letter of credit enables intermediaries (first beneficiaries) to offer security in the form of a letter of credit to their suppliers (second beneficiaries). See letter of credit.

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