Calculation of maturity dates

jabra · Post by **jabra** » Thu Mar 05, 2009 11:26 pm

dear all,

is it only me who gets all the unusual credits. i receive credit where the tenor shows 120 days sight. available by deferred payment undertaking with issuing bank. but among the terms and condition it is said that the maturity date will be calculated from the date of acceptance of the document by the issuing bank. so far i understand, 120 days sight means that the maturity will be calculated from the date of presentation. :?

eximconsulting.net · Post by **eximconsulting.net** » Fri Mar 06, 2009 8:13 am

Dear Jabra ;

Sight payment means that payment should be made when the presentation is seen or sighted.

Deferred payment is considered with occurance of the below terms ;

a: if payment is not immediate
b: if payment is at a time in the future,determinable in accordence with the documentary credit
c: a draft is not required to be presented.

According to my knowledge the L/C you are asking about is a deffered payment L/C.

It is highly recommended to specify a fixed period of time for maturity dates of deffered L/Cs.

For example , 120 days after Bill of Lading date or 120days after Invoice date etc.

Hope these explanations were helpful for you.

Regards,

Ozgur Eker

Judith · Post by **Judith** » Thu Mar 12, 2009 9:37 am

This is definitely a deferred payment LC. While the tenor states 120 days sight, the additional condition qualifies that tenor as “from the date of acceptance”. (Pesonally, I've never likes tenors based on "sight" and the maturity date calculation gets messed up.)

Interestingly, while the UCP talks about 5 banking days to refuse documents, it does not talk about how many days a bank has to honour the credit! By default, we assume that the days available for honour is the same.

In this case, maturity date will have to be calculated based on the issuing bank’s message which in no case can be later than 5 banking days after the receipt of documents.

PS. Collect "interesting" credits. Who knows. Maybe one day you can write a book about it!

SHAMEER · Post by **SHAMEER** » Wed Apr 01, 2009 3:07 pm

In your question the wordings “from the date of acceptance of the document” contradicts with what shown in 41A. So, the lc needs correction. The issuing bank cannot put a condition such as “from the date of acceptance of the document”.

.

Regards

MS