(a) An issuer or nominated person has a security interest in a document presented under a letter of credit to the extent that the issuer or nominated person honors or gives value for the presentation.
(b) So long as and to the extent that an issuer or nominated person has not been reimbursed or has not otherwise recovered the value given with respect to a security interest in a document under subsection (a) of this section, the security interest continues and is subject to article 9 of this title, but:
A security agreement is not necessary to make the security interest enforceable undersection 4-9-203 (b)(3);
If the document is presented in a medium other than a written or other tangible medium, the security interest is perfected; and
If the document is presented in a written or other tangible medium and is not acertificated security, chattel paper, a document of title, an instrument, or a letter of credit, the security interest is perfected and has priority over a conflicting security interest in the document so long as the debtor does not have possession of the document.
Source: L. 2001: Entire section added, p. 1441, § 28, effective July 1.
Applicability. This article applies to a letter of credit that is issued on or after July 1, 1996. This article does not apply to a transaction, event, obligation, or duty arising out of or associated with a letter of credit that was issued before July 1, 1996.
Source: L. 96: Entire article R&RE, p. 202, § 1, effective July 1.
Saving clause. A transaction arising out of or associated with a letter of credit that was issued before July 1, 1996, and the rights, obligations, and interests flowing from that transaction are governed by any statute or other law amended or repealed when this article was enacted as if repeal or amendment had not occurred and may be terminated, completed, consummated, or enforced under that statute or other law.
Source: L. 96: Entire article R&RE, p. 202, § 1, effective July 1.