Focus on the pronunciation of letter of credit
English definition of “letter of credit”
letter of credit
noun [C] (plural letters of credit) (abbreviation L/C)
› FINANCE, COMMERCE a financial document in which a bank formally promises to pay a particular amount of money into the bank of a person selling goods if the goods are delivered by an agreed date and in an acceptable condition. Buyers often use letters of credit to buy goods from other countries: The bank issued the letter of credit on the instructions of the importer. For export sales, the price of the goods are secured by a letter of credit.
› FINANCE in a situation in which bonds, etc. are sold, a written promise by a bank to pay the lender if the borrower is unable to do so: The notes are secured by bank letters of credit. → See also confirmed letter of credit, documentary letter of credit, irrevocable letter of credit, confirmed letter of credit, standby letter of credit