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Dear experts,

I would be grateful if you could explain what is fresh cut SBLC or monetized SBLC.
In my understanding the bank issues SBLC on behalf of the applicant who needs financing. The bank sends SBLC to the beneficiary who gives money to the issuing bank for financing the applicant. Please, correct me if this is wrong.
And the main question for me is the following:
Is the risk for the issuing bank the same for fresh cut SBLC or usual SBLC (I.e does the issuing bank need collateral upon issuance or this scheme some other way covers the banks risks?)

Thanks in advance for your valuable comments