Maturity of payment of the transferred LC!

[Navi]

Hi friends,
.
We are transferring an LC to second beneficiary which is confirmed and available by deferred payment ( 45 days after BL date) with our bank. According to UCP600 38g, LC should be transferred reflecting the terms and conditions of the original credit stating the exceptions not including maturity date of payment. Our problem: payment will be effected by the issuing bank on maturity date and we should pay to second beneficiary with the same value date. Lets say we receive LC from USA and transfer it to China. How can we achieve this? Or can we extend the payment to lets say "47 days after BL" while transferring LC?

Regards

[shahriar]

dear navi,

interesting question indeed. you said the LC is confirmed by you. so your payment undertaking is independent of the issuing bank. so when you are receiving the payment from the issuing bank is irrelevant. however i think we can extent the maturity.

[Navi]

dear navi,

interesting question indeed. you said the LC is confirmed by you. so your payment undertaking is independent of the issuing bank. so when you are receiving the payment from the issuing bank is irrelevant. however i think we can extent the maturity.

Thanks Shahriar,

In theory, yes you're right but in practice banks here, want to pay to benef. after receive funds from issuing bank and arrange LC terms relating payment to enable this. That's why I wanted to be sure whether I can extend maturity while transferring...

Best Regards

[shahriar]

i understand your point. well in that case i see no harm in extending the tenor and i dont think that is going to affect the original credit badly.

[ldt5205]

In my opinion,it is not necessary to extend the tenor.
This LC is confirmed and available by deferred payment ( 45 days after BL date) with your bank.That means your bank should pay to the second BEN weather or not payment will be effected by the issuing bank .You may claim from the issuing bank together with interest.

[wongvv]

Hi !

1. Confirming bank (transfering bank) must pay the (2nd) beneficiary or its banker at maturity without delay when compliant documents presented.
2. Transfering bank is not permitted to extend the tenor by UCP600
3. Confirming bank is not entitled to claim any interest from issuing bank unless it is caused by the delay issuing bank's payment.

Conclusion:
Not only in transfer L/C, the risk undertaken by confirming bank under defer payment L/C always exist !

[nesarul]

Dear All,
Hope fine,
there is no need for extension of tenor. the credit is:
available by deferred payment with confirming bank
90 days from the date of b/l:
assumption:
presentation constitute complying presentation, of discrepant document without providing notice even in discrepant document followed by a notice by acceptable waiver has been received before maturity.....

maturity date is always fixed for all [issuing bank, confirming bank, transferable credit, transferred credit etc.). so need for extension of tenor is not necessary.......
pls guide me if i go in wrong ytrack.
regards
nesar